JAKARTA - The value of SpaceX shares owned by Kingdom Holding Co. jumped to around 6.83 billion US dollars after the space and technology company listed on the Nasdaq. The increase was almost 53 percent from the previous recorded value.
As reported by Arab News quoted Sunday, June 14, the Saudi investment company controlled by Prince Alwaleed bin Talal conveyed the data in information disclosure to the Saudi Exchange.
SpaceX completed its initial public offering or IPO on June 12 at a price of 135 US dollars per share. An IPO is the company's first sale of shares to the public. On the first day of trading, SpaceX shares closed at 160.95 US dollars.
Kingdom Holding owns 42.4 million Class A common shares of SpaceX. That amount is equivalent to 0.34 percent ownership in the company.
In its financial statements as of March 31, the ownership was recorded at US$4.47 billion or 16.76 billion Saudi riyals. After SpaceX's share price rose, its value was around US$6.83 billion or 25.6 billion Saudi riyals.
This means that Kingdom Holding recorded a potential profit of around 2.36 billion US dollars. This profit has not been realized because the shares have not been sold.
In the same report, Arab News said Kingdom Holding's investment began with its ownership of Twitter in 2011. The investment then became part of SpaceX through a series of transactions involving X and xAI.
However, Kingdom Holding has not been able to freely dispose of its shares. According to the IPO provisions, SpaceX shares owned by the company are subject to a lock-up period of up to 180 days from listing. This means that certain shareholders cannot sell their shares during this period, unless they meet the conditions for early release.
The closing price of the first day makes SpaceX's market capitalization estimated to reach around 2.1 trillion US dollars. Market capitalization is the value of a company based on the share price multiplied by the number of outstanding shares. The figure is higher than the valuation of around 1.77 trillion US dollars based on the IPO price.
SpaceX raised 75 billion US dollars from the IPO. According to Nasdaq, the offering was the largest IPO in Wall Street history. SpaceX shares are traded under the code SPCX.
SpaceX is offering 555.6 million new shares, with an additional over-allotment of 15 percent. This option allows the underwriters to sell additional shares if market demand is high.
The proceeds from the IPO will be used to support SpaceX's growth, including AI computing capacity, launch infrastructure, spacecraft, and expansion of the satellite constellation.
For Kingdom Holding, the listing of SpaceX on the exchange also has an impact on accounting records. The shares can be reclassified from Level 3 assets to Level 1 in the IFRS 13 fair value hierarchy. Simply put, Level 1 assets are valued based on active market prices, while Level 3 uses internal assessments because there is no direct market price.
Kingdom Holding said the value of its SpaceX holdings would be reassessed based on the prevailing share price on each reporting date. The company also said there were no costs associated with this latest development.
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