Will SpaceX Skyrocket on Trading Debut?

SPEAKER_1 (0:00)

People are building things here in America again, and this moment calls for the best of America, our people. Introducing America's Workforce Academy, built by Meta. A program helping to train the next generation of welders, fiber installers, crew leaders, and more. Paid training, a job, and a path to America's future, because the future is for everyone.

Learn more at meta.com/america'sworkforceacademy.

Luke Vargas (0:33)

We're counting down to the biggest IPO of the year with SpaceX due to begin trading later today.

Plus, the UK's Defense Secretary quits. We'll look at what it says about Europe's military readiness.

Alistair MacDonald (0:45)

Europe began to defend sovereignty. It really needs its traditional military powers, which is really Britain and France, to step up the plate. At the moment, it's only really Germany.

Luke Vargas (0:55)

And Barclays forecasts that Harrys will outspend Swifties. Confused? I promise you won't be in just a few minutes. It's Friday, June 12th. I'm Luke Vargas for the Wall Street Journal, and here is the AM Edition of What's News, the top headlines and business stories moving your world today.

We are just hours away from SpaceX's trading debut, the largest IPO ever. Its size and value is set just shy of $1.8 trillion, and big firms and retail investors alike have their orders all lined up.

But what will happen when shares finally hit the market later today? After all, Tesla saw its stock jump 40% in its debut, and even much smaller moves from SpaceX could trigger a pause in trading, as our Caitlin McCabe explains.

Caitlin McCabe (1:44)

I think everyone right now is really interested, obviously in how the stock will perform today, but also just the mechanics and the plumbing around it. For most newly listed companies, a 10% swing in either direction prompts a five-minute pause in the stock. This has been used recently. Companies including the software company Figma, which debuted last year, and Cerebra Systems, which went public earlier this year, they both had their shares halted. So a very volatile launch could definitely see a repeat of that. But there are some options to help stabilize the stock if things start trading really erratically. There is this thing that's known as the green shoe option.

It essentially gives the so-called stabilization agent, which in this case is Morgan Stanley, a secret weapon to calm things down. So if the stock starts to fall severely, the bank will buy the shares in the open market, which will help buoy the stock price. And finally, we'll be watching to see how this listing affects the broader market. SpaceX won't be included in any major index funds for several days, but there was some interesting data out from Vanda Research the other day. It showed that retail investors have been selling shares of some of the really buzziest, most popular stocks in the market in the last few days, companies like Marvel Technology, Micron Technology, even Apple. And the thinking is that they're trying to amass dry powder in order to buy shares of SpaceX. So if the IPO is going really well, it's possible that retail investors and frankly other types of investors in the market will want to sell those shares and that could stoke more volatility throughout the market.

Luke Vargas (3:26)

And for much more on what to expect on SpaceX's first trading day, from whether the stock is worth the hype or just how quickly today's IPO will make Elon Musk a trillionaire, check out the links we've left in our show notes.

Oil prices have fallen below $90 a barrel today after President Trump called off planned strikes on Iran and said that a peace deal could be reached within days. Crude is on track to end the week 8% lower. But as Dow Jones energy reporter Julia Petroni explains, any significant drop in oil prices could still be a long way off.

Julia Petroni (3:59)

Oil prices have been on a bit of a wild ride in recent months. Brent crude was trading in the low 70s before this war started. And we've seen it reach to nearly 120 at some point during the conflict.

The ultimate impact on oil prices depend on how quickly flows can be restored through the Strait of Wormwoods, which could take months. We're facing a number of challenges from the clearing of sea mines to the repositioning of the global tanker fleet, damage to infrastructure and production facilities in the Gulf, and also shut in oil wells, which do not simply resume production at the turn of evolve. So forecasts are highly uncertain and volatile. Most analysts have spoken to say Brent is unlikely to drop below 80-year-barrel until round trips through Ormuz can resume.