SpaceX Shares Jump in Second Day of Trading After Record IPO

Summary

David Bauer, head of equity capital markets Americas at JPMorgan, discusses the record SpaceX IPO and the broader equity issuance environment. He argues that the IPO euphoria is justified by a real investment thesis around space becoming an industry, and recommends continuing to buy SpaceX shares. He also notes that broader IPO activity in healthcare, biotech, and industrial energy is picking up, and that the market is not in bubble territory like 2021.

• SpaceX IPO was the largest ever, with the stock finishing up 19% on day one and rallying another 15% on day two.
• Bauer sees a real investment thesis in SpaceX as part of the reindustrialization of America and emergence of space as an industry.
• He explicitly says investors should continue buying SpaceX even after the initial pop, calling it a generational transformation.
• Broader equity capital markets remain very active, with new issuance volumes up nearly two-fold year-on-year.
• Healthcare, biotech, and industrial energy issuance is coming back, showing broadening beyond mega tech IPOs.
• Market fundamentals and valuations are not stretched like in 2021; the current cycle is more fundamental-based.
• Private equity IPOs are expected to increase significantly in the second half of the year.