SpaceX's initial public offering (IPO) has drawn an order of at least $5 billion from BlackRock, according to an exclusive report by the Wall Street Journal. This substantial commitment underscores the significant confidence major asset managers have in the commercial space sector and SpaceX's market position. The specific pricing and timeline for the IPO remain undisclosed.

The $5 billion target figure highlights the scale of capital allocation BlackRock is considering for the space exploration company's public debut. This investment reflects growing institutional interest in the industry, driven by advancements in satellite technology and space transportation services.

SpaceX, founded by Elon Musk, has established itself as a dominant player in the private space industry. The company handles critical missions for NASA and continues to develop its Starlink satellite internet constellation, which has expanded its global reach.

The following table outlines the key details mentioned in the report:

Retail investors are liquidating positions in major semiconductor and AI stocks to raise capital for the SpaceX initial public offering, creating selling pressure across the technology sector. The IPO, priced at $135 per share, aims to raise $75 billion at a roughly $1.75 trillion valuation, with over $70 billion in retail orders already submitted. This liquidity event has prompted individual investors to net sell equities for three consecutive days through Wednesday, the first such streak since March 2020, according to Vanda Research data cited by CNBC. The selling is concentrated in chip names and AI-adjacent stocks as investors reallocate funds to secure shares in SpaceX.

Chip stocks face selling pressure

Micron Technology, Inc. has become a focal point of the sell-off. BNP Paribas reported $6.5 billion in net retail inflows into Micron over the past month, which helped drive the stock up 87% in that period. However, shares remain nearly 16% off their 52-week high of $1,089.29 as recent selling has taken a toll. Greg Boutle of BNP Paribas attributed Micron's decline directly to retail "selling off recent winners and leveraged products" to fund SpaceX allocations. Advanced Micro Devices, Inc. is also under pressure, trading at $468.33, up 3.52% on Thursday but still roughly 14% below its yearly peak. Broadcom Inc. and Apple Inc. have seen modest recoveries after earlier declines, while the iShares SOX Semiconductor Sector Index Fund traded down in four of the last five days.

Liquidity event dynamics

BNP Paribas warned that the SpaceX liquidity event could be unlike any other during the AI rally. The bank estimates retail plus passive flows into SpaceX could reach $50 billion. Since retail investors rarely hold idle cash, they must sell existing holdings to participate. These holdings are heavily concentrated in chip stocks and leveraged Nasdaq products. U.S. equity leveraged ETF assets recently hit a record $175 billion, with most parked in NASDAQ-100 and semiconductor plays. When retail investors redeem these funds, the underlying derivative positions unwind, amplifying selling pressure on the underlying stocks.

SpaceX IPO details and outlook

SpaceX has reserved at least 20% of shares for individual investors, an unusually large retail carve-out. Viraj Patel, global macro strategist at Vanda, noted that the question is not whether retail will buy into the SpaceX deal, but whether they do so by establishing new positions or by more aggressively selling recent chip winners. The recent tech sell-off suggests the latter is already occurring. The offering, which trades under the ticker "SPCX," is set to debut on Friday.