SpaceX’s drop-off sees Elon Musk’s net worth fall $240 billion, same value as IBM

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**SPEAKER_4** (1:30)
A single company lost $400 billion in market value during a single trading session. Immediately after its public debut, made its founder the world's first trillionaire.

**SPEAKER_5** (1:41)
You are raised $400 billion from the market. You are entirely wiping out a legacy tech giant like IBM, just gone in a few hours of trading.
And yet, even after absorbing a hit that large, this particular aerospace company is still sitting there, valued at over $2 trillion.

**SPEAKER_4** (2:00)
It is because a private aerospace firm finally went public. But if you look closely at the prospectus, it revealed the company had secretly morphed into an artificial intelligence conglomerate.

**SPEAKER_5** (2:10)
Which brings up the obvious problem. How does a company sustain a valuation larger than Amazon or Microsoft when its core growth engine is just incinerating billions of dollars every single quarter?

**SPEAKER_4** (2:20)
Well, the raw numbers on this public offering are just difficult to process. They priced the shares at $135 each.

**SPEAKER_5** (2:26)
Right.

**SPEAKER_4** (2:27)
That resulted in a total raise of $75 billion. That pushes the initial valuation toward $2 trillion.

**SPEAKER_5** (2:32)
It shatters the previous global record for a public debut.

**SPEAKER_4** (2:36)
Yeah, by a lot. The record was held by Saudi Aramco at roughly $29 billion.

**SPEAKER_5** (2:42)
And the way they actually arrived at that $135 price is highly irregular. I mean, they completely bypassed the traditional institutional bookbuilding process.

**SPEAKER_4** (2:52)
Right. So normally, a company going public goes on a roadshow. The executives travel around. They meet with large institutional buyers, sovereign wealth funds, major asset managers.

**SPEAKER_5** (3:02)
The people with the actual capital.

**SPEAKER_4** (3:04)
Exactly. They gauge interest and try to find a price range based on what those professionals are actually willing to pay for the underlying fundamentals.

**SPEAKER_5** (3:12)
It acts as a price discovery mechanism. The investment banks build a book of demand. They see who will buy at what price, and they settle on a number that clears the market, but usually leaves a little room for a first day pop.

**SPEAKER_4** (3:24)
But here, the company went straight to the market with a fixed non-negotiable price. Just take it or leave it.

**SPEAKER_5** (3:31)
Which makes it really hard to view the opening day surge as a natural market reaction.

**SPEAKER_4** (3:35)
Because it wasn't. The demand was effectively engineered through structural scarcity.

**SPEAKER_5** (3:40)
You have to look at the float.

**SPEAKER_4** (3:41)
Right.

**SPEAKER_5** (3:42)
Only about 5% of the company shares are actually floating and available to trade on the open market.

**SPEAKER_4** (3:47)
It is like renting out a 50,000 seat stadium, but you only unlock one single turnstile to let people in. You are going to create a stampede.

**SPEAKER_5** (3:57)
Yeah. The crush of people at that one door creates the illusion of infinite unquenchable demand.

**SPEAKER_4** (4:04)
When you constrain supply to a fraction of the total equity like that, even a very moderate amount of buying pressure, creates extreme upward price velocity.

**SPEAKER_5** (4:13)
And the allocation strategy just compounded that velocity. 30% of the available shares were allocated directly to retail investors.

**SPEAKER_4** (4:21)
That is triple the standard allocation for a mega cap offer.