Elon Musk's SpaceX began trading publicly on Monday, with the market absorbing what is being described as a trillion-dollar IPO era. The debut had investors and analysts closely watching for its impact.
The company's entry into the public market is a major event, but one strategist at JPMorgan Asset Management warns its effects will take time. "Any large IPO has a gravitational pull to them," Aaron Mulvihill told Axios, noting it could influence both public and private markets.
SpaceX offered only 5% of its shares to the market, a fraction of the typical IPO. Mulvihill says issuers generally release 10%-20% of shares as float, but a larger offering of a $2 trillion company might have been disruptive.
The small float means the company's sky-high valuation should be viewed with caution. "It's all on paper for now," Axios notes, comparing the limited share availability to putting just 50 out of 1,000 boxes of cookies on sale.
This constrained supply could lead to sharp price swings as demand vies for a limited float. Whether retail investors get a meaningful stake, or big institutions dominate the early trading, remains to be seen.