The stock market in New York will open at 9.30 a.m. local time as usual today and then, a few hours later, shares in Elon Musk’s SpaceX will begin trading publicly, starting at an offer price of $135 per share.
At a value of $1.8 trillion, the SpaceX offering will be the biggest IPO of all time.
The event will be especially nerve-wracking for one group of investors: the doctors, lawyers, dentists, entrepreneurs, and other high-net-worth individuals who privately bought shares on the shadowy “secondary” market back when SpaceX’s stock consisted only of private equity. When the insider lockup period ends, they will find out whether they hit the jackpot or were taken in by a scam, reports Fortune’s Allie Garfinkle.
Because secondary shares are traded via private contracts, often in secret, buyers are vulnerable to fraud. They won’t know if the paper contracts they bought are worth the paper they’re written on until it comes time to try to sell them. It’s not a question of whether fraud will be uncovered when SpaceX IPOs; it’s a question of how much fraud will be uncovered.
“How many people think that they have bought into SpaceX, but they’re actually just funding some dude’s coke habit in Miami? The number is not zero,” said Anduril cofounder Matt Grimm, when he spoke to Fortune a few months ago.
