A collective sigh of relief went through Wall Street following the trading of SpaceX’s historic launch on the Nasdaq on Friday (12), setting a new standard for brokerages and stock exchanges preparing for the also gigantic IPOs of OpenAI and Anthropic later this year.
It surpassed the largest previous IPO on American stock exchanges by almost three times. The magnitude of the launch had worried market participants, who still remembered Facebook’s debut on the stock exchange in 2012, which faced technical problems in the historic listing.
However, the trading systems of banks that coordinated the IPO, stock exchanges, market makers, clearing houses and other market infrastructure companies coped well with the challenge of processing millions of customer orders.
“Honestly, I think the banks in the United States did a fantastic job, the SpaceX team did a fantastic job of telling the story during the presentations. And as you can see, everything went extremely well,” said Jeff Parks, CEO of Canadian investment firm Stack Capital Group. Nearly a third of Stack’s portfolio is made up of SpaceX shares, which the company began investing in in 2021.
As in its debut, increasing the company’s market value to more than US$2 trillion and consolidating its status as a .
According to Citadel Securities, the largest retail market maker in the US, SpaceX’s debut generated the largest volume of retail orders for an IPO auction in history. A spokesperson for Citadel Securities said the company brokered the majority of the company’s retail orders.
Morgan Stanley, the so-called “stabilizing agent” for SpaceX’s debut on the stock exchange, played a fundamental role in managing the company’s IPO. The bank had to ensure an orderly implementation, even in the face of unprecedented demand from investors. A stabilizing agent typically buys shares on the open market to support stocks that experience sharp declines on opening day.
Trading platform Charles Schwab reported receiving more than a million orders to buy SpaceX shares in the first few hours of trading, a significant number compared to previous IPOs, according to a company spokesperson.
Reuters reported on Thursday (11) that Wall Street traders, brokers and stock exchanges had been carrying out stress tests on trading systems for several weeks, ahead of the IPO in question.
SpaceX shares “aren’t rising in big chunks, but they are rising little by little, and a lot of that is due to an IPO that’s a little weaker and lackluster than many expected,” said Mike Dickson, head of research and quantitative strategies at Horizon Investments. “I’m a little surprised by the lack of volatility considering the news about stocks being overvalued.”
Debuts of major IPOs in the past have often faced delays because exchanges have to juggle huge volumes of buy and sell orders before determining the opening price. In the case of SpaceX, shares began trading at the beginning of Friday (12). This was relatively early compared to the recent IPOs of Cerebras Systems and Quantinuum, which opened later in the afternoon on their respective debut days.
Aside from some issues with early trading on Robinhood on Friday, Wall Street has largely been free of the technical glitches that marred Facebook’s launch in 2012 – much to the relief of Nasdaq, market makers and investors.
“We work very well as a team. We did extensive preparation with our banking partners,” highlighted Nasdaq CEO, Adena Friedman, in an interview with CNBC on Friday (12). “We made sure we talked to all the companies throughout the preparation process, and everything went perfectly,” he concluded.
