SpaceX’s June IPO Spurs Korean Investor Interest, With Direct Access Unlikely

SpaceX IPO or ETF?

Direct IPO access likely out of reach for Korean retail investors

Korean space ETFs roll out ahead of the listing

Interest is building among Korean investors as SpaceX, widely viewed as the biggest candidate for a global initial public offering this year, moves to within two months of a listing. The private space company led by Tesla Chief Executive Officer Elon Musk is one of the world’s fastest-growing technology firms, with revenue rising tenfold over six years, from $1.5 billion in 2019 to $15 billion in 2025, based on figures before a merger with xAI.

Bloomberg has reported that SpaceX could command a $2 trillion valuation after listing. The IPO is expected to raise about $75 billion, more than double the record $29.4 billion offering completed by Saudi Aramco in 2019.

Nasdaq has also changed its index-inclusion rules in an effort to land the listing. Previously, a company had to wait at least three months after listing to join the Nasdaq-100. Under the revised rule, inclusion will be possible after 15 trading days.

Direct participation in SpaceX’s IPO is effectively out of reach for Korean investors

As of May 1, the financial investment industry expects SpaceX to offer less than 5% of its total equity in the IPO. With such a small float, even major institutional investors may struggle to secure an allocation.

Unlike South Korea, US listing rules do not require that a set portion of IPO shares be reserved for retail investors. Lead underwriters, which control allocations, typically give priority to pension funds and asset managers with long-term investment mandates.

Mirae Asset Securities, one of more than 20 global underwriters on the SpaceX deal, recently decided to bring more than $1 billion of IPO shares to Korea. Even so, the brokerage industry expects it will be difficult to allocate shares to Korean retail investors under the domestic subscription schedule.

South Korea’s financial authorities recently told Mirae Asset to refrain from excessive marketing tied to a domestic offering of SpaceX shares, according to the industry. There is no precedent for directly allocating shares in an overseas-listed IPO to Korean retail investors. A move like that would also require a regulatory review of issues including securities registration statements and offering procedures under the country’s capital-markets law.

If that happens, Mirae Asset Securities is expected to allocate the shares to domestic institutional investors or private equity funds. The firm plans to determine whether a retail subscription in Korea is possible after allocations to investment banks are finalized this month.

Indirect investment through ETFs? Rapid inclusion after listing

If a retail allocation in the IPO falls through, individual investors could instead buy exchange-traded funds that plan to add SpaceX after it lists. Because ETFs also hold other stocks, they do not fully capture SpaceX’s standalone upside. At the same time, some market participants say a basket that includes satellite communications companies and defense contractors may offer a safer way to invest, given the volatility of the space industry.

None of the space-related ETFs currently offered by Korean asset managers holds SpaceX yet. Instead, they offer indirect exposure by betting on a broader rally in space stocks tied to the listing or by owning companies with stakes in SpaceX. The managers say they plan to add the stock as quickly as possible and at the highest weighting allowed once it goes public.

Shinhan Asset Management’s SOL US Space Aerospace TOP10 ETF, which listed on April 21, holds Rocket Lab at 26.69%, AST SpaceMobile at 13.99%, EchoStar at 13.83% and Planet Labs at 10.06%.

The manager said the fund was designed so that, if SpaceX lists, the stock can be added within one business day under the index methodology, with a weighting of as much as 25%. Kim Jeong-hyeon, head of Shinhan Asset Management’s ETF business group, said the product was built to reflect the growth potential of the US space industry with a concentrated basket of core companies in the New Space era.

Mirae Asset Global Investments’ TIGER US Space Tech ETF has increased its exposure to the sector by concentrating on core holdings including Rocket Lab at 26.74%, Intuitive Machines at 17.36%, Redwire at 13.94% and AST SpaceMobile at 11.37%.

The fund allocates about 70% to upstream segments responsible for physical space infrastructure such as launch vehicles and satellites. It also concentrates about 70% of assets in its top four holdings.

Mirae Asset Global Investments plans to use a structure that would allow it to add SpaceX within two trading days of a listing, with a weighting of as much as 25%. Kim Nam-ho, head of global ETF management at Mirae Asset Global Investments, said the private space industry has moved beyond a simple theme to become core infrastructure that can shape national competitiveness. Strategies focused on proven industry leaders are driving flows into space ETFs, he added.

Korea Investment Trust Management’s ACE US Space Tech Active ETF uses an active strategy, allowing portfolio managers to directly adjust holdings while focusing investments on US-listed space technology companies. The fund has raised its weighting in private space companies rather than defense names, focusing on high-growth areas such as reusable launch vehicles, satellite data analytics and space data centers.

Its holdings include EchoStar, which owns a stake in SpaceX, at 23.89%, Rocket Lab at 19.27%, Planet Labs at 6.65%, Intuitive Machines at 4.58% and Redwire at 4.14%. It also holds Tesla and Alphabet, which also own stakes in SpaceX, at 3.33% and 3.1%, respectively.

Kim Hyun-tae, an executive at Korea Investment Trust Management, said the key in the space industry’s early growth phase is responding quickly to market changes. The active ETF structure will also allow the fund to add major companies such as SpaceX quickly if they list in the future, he said.

Samsung Asset Management’s KODEX US Space Aerospace ETF is structured to invest across the US aerospace value chain, including launch vehicles, satellites, communications and defense, with core holdings such as Rocket Lab and AST SpaceMobile.

NH Investment & Securities recently revamped the iSelect US Space Aerospace Index ahead of a SpaceX listing so that a core company such as SpaceX can be added quickly through a special inclusion process with a weighting of as much as 25%. Samsung Asset Management’s KODEX US Space Aerospace ETF tracks that index.

Noh Jeong-dong, Hankyung.com reporter, dong2@hankyung.com