ASTS, RKLB, LUNR, RDW Slip As SpaceX IPO Terms Buzz Grows — Retail Stays Mostly Bullish As Analyst Maps Bear Case

• SpaceX could reportedly reveal IPO terms as early as Wednesday, with pricing targeted for June 11.
• The company is reportedly seeking to raise $75 billion by selling 555.6 million shares at $135 each, implying a valuation of $1.75 trillion to $1.8 trillion.
• SpaceX plans to structure the deal as an all-primary offering, with all proceeds going to the company and existing shareholders barred from selling shares during the IPO.

Space stocks slipped overnight ahead of Wednesday as investors awaited pricing details for SpaceX's record-breaking $1.8 trillion debut, a valuation that has already drawn warnings from Wall Street.

AST SpaceMobile (ASTS) fell over 1%, Rocket Lab (RKLB) and Intuitive Machines (LUNR) shed about 0.5% each, Redwire (RDW) eased 0.4%, and Rocket One (RKTO) fell 7%.

Investors Await SpaceX Pricing Details

Elon Musk-led SpaceX could unveil key details of its long-awaited IPO as early as Wednesday, according to Bloomberg, potentially giving investors their first detailed look at the offering before marketing begins. Meanwhile, Reuters reported that SpaceX plans to raise $75 billion by selling 555.6 million shares at $135 per share, implying a valuation of $1.75 trillion to $1.8 trillion and comfortably surpassing Saudi Aramco's $29.4 billion IPO in 2019.

A roadshow could begin shortly after the updated filing, with pricing reportedly targeted for June 11. SpaceX supposedly plans to structure the deal as an all-primary offering, meaning all 555.6 million shares being sold would be newly issued by the company and all proceeds would flow directly to SpaceX. Existing shareholders, including employees and early investors, would not be able to sell stock in the IPO and are expected to remain subject to staggered lockups after the listing.

Space stocks have been volatile ahead of the IPO. The sector initially rallied after SpaceX said it had identified the "largest actionable total addressable market in human history," estimating a $28.5 trillion opportunity spanning space services, Starlink connectivity and AI. However, sentiment has cooled in recent days as investors weigh the company's proposed $1.75 trillion to $1.8 trillion valuation and growing concerns that the IPO may already be pricing in much of that future growth. 

The Next Wave Of SpaceX Millionaires

SpaceX is also reportedly negotiating underwriting fees of less than 0.75%, well below traditional IPO levels. Despite the discounted rate, the deal could still generate $500 million in fees for participating banks due to its massive size. The proposed structure is also expected to preserve Elon Musk's effective control of the company and could pave the way for rapid inclusion in the Nasdaq 100, potentially creating an additional source of demand from passive investment funds.

Over 1,000 current and former SpaceX employees have joined forces to negotiate lower advisory fees and gain access to sophisticated wealth-management products ahead of the listing, per Bloomberg. The group, which initially represented around $2 billion in assets, is now estimated to oversee up to $20 billion in wealth. Members have reportedly explored strategies ranging from equity-backed lending to tax-management structures.

Can SpaceX Justify Its Sky-High Valuation?

Now, the biggest question around the IPO is no longer whether investors want exposure to SpaceX. It is whether they are being asked to pay too much for it. Recently, Morningstar assigned the company a fair value estimate of $780 billion, which is half the reported valuation ahead of the offering: "We think it's very likely we will see the shares as overvalued." 

It added that a valuation above $1.5 trillion would likely lead it to view the stock as overvalued under almost any near-term scenario. "Max Q," the point of greatest pressure during a rocket launch, "will come for SpaceX's stock in the months following the IPO," Morningstar said, referring to the period when additional shares held by employees and early investors become eligible for sale.

However, the research firm acknowledged that scarcity could work in SpaceX's favor. With a limited float, strong investor appetite for AI infrastructure investments, broad Wall Street support and a potential fast track into the Nasdaq 100, Morningstar said shares could initially outperform despite valuation concerns. Morningstar said SpaceX stock could "survive separation and even ascent toward orbit" after listing.

How Do Retail Traders Feel About Space Stocks?

On Stocktwits, retail sentiment toward SpaceX remained 'bullish' amid 'extremely high' message volume. Among space stocks, ASTS and LUNR sentiment was 'bullish,' though message volume was 'high' for ASTS and 'normal' for LUNR. RDW drew 'extremely bullish' sentiment amid 'high' message volume, while RKLB's sentiment was 'neutral' with 'normal' message volume.

Over the past year, ASTS has surged 389%, followed by RKLB at 364%, LUNR at 259%, and RDW at 28%. 

For updates and corrections, email newsroom[at]stocktwits[dot]com.

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