SpaceX IPO demand overwhelms CommSec call centre: Australian interest in Elon Musk push strong
High-profile fund manager Geoff Wilson said it was ironic Australians were rushing to the float when Labor was about to make share investing more expensive.
Interest is so strong among Australian investors for this week’s SpaceX share market float that clients had to wait almost an hour on Monday to reach the Commonwealth Bank’s stockbroking arm, CommSec.
In an unusual move, the CommSec call centre operated throughout the King’s Birthday long weekend to field questions about the Australian allocation of shares in the largest initial public offering in history.
“We are receiving a very high volume of applications at the moment,” a call centre operator told The Nightly after a 56-minute wait for an answer today.
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“At the same time the Australian government is proposing the capital gains tax changes that will discourage investment in Australian growth companies, Australians are lining up to invest billions into one of America’s success stories,” he told The Nightly.
“Capital is mobile. If you make Australia less competitive, capital won’t disappear. It will simply go elsewhere, which is what is clearly occurring with SpaceX.”
As a business that does not intend to pay dividends and will reinvest any profits, SpaceX is the kind of investment likely to be caught by increases to capital gains tax introduced in this year’s Budget.
Prized role
It is unclear how many of the 555,555,555 shares on sale will be allocated to Australians. But Australia has one of the world’s larger pools of investment savings and millions of potential customers for SpaceX’s products, which include the X social media site and the Starlink internet service.
Eight Australian stockbroking firms have been granted the prized job of selling shares in the company, which is formally known as Space Exploration Technologies Corp.
The deadline for applications is 5pm Australian eastern time on Wednesday.
Many potential investors will be unable to make the cut-off. The CommSec call centre staff member said it would take one to two days to open a trading account and another four for permission to buy or sell foreign shares.
SpaceX shares are scheduled to begin trading late Friday evening Australian time at an initial market capitalisation of $US1.7 trillion ($2.4 trillion).
The company will not be traded on the Australian Securities Exchange, which means investors will face the risk from changes in the value of the US dollar in addition to the prospect the shares will go up or down — a lot.
‘Not a space IPO’
SpaceX’s signature space rockets are less important, financially, than its investment in artificial intelligence through xAI, which operates Grok, a competitor to ChatGPT, analysts say.
“This is not really a space IPO,” wrote American tech entrepreneur James Smith. “It is an AI infrastructure IPO disguised as a rocket company.”
Critics say the unprofitable business does not deserve to be among the most valuable companies in history. Supporters argue founder Elon Musk’s record of building businesses is a good reason to invest.
Even after the sale, Mr Musk will hold 80 per cent of the shares, appoint the board and will be able to overrule any other investors. He could also become history’s first trillionaire.
One Australian detractor criticised CommSec for supporting a “ponzi scheme (that) will see, once again, huge wealth quickly transferred to the ultra wealthy”.
Martin Walsh, a producer of the war movie Danger Close, said any losses would disproportionately affect pension and superannuation funds investing on behalf of individuals.
“And Australia’s largest bank, CommSec is promoting it in Australia, is even acting as the lead retail broker,” he wrote on LinkedIn. “Disgraceful.”
A Commonwealth Bank spokesman declined to comment on the share sale.
CommSec will receive 0.2 per cent of the value of shares it sells, potentially delivering the business a multi-million-dollar profit. A local law firm, Gilbert + Tobin, will be paid $1.8 million for helping out with the paperwork.
