Japan’s Retail Investor Army Flocks to SpaceX After IPO Drought

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(Bloomberg) — SpaceX is bringing excitement to corners of the world where investors have long been starved of marquee deals.

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The enthusiasm in Japan, home to about $15 trillion of household financial assets, is so fervent that the company recently raised its local fundraising target by a quarter to $2.5 billion. That makes it a rare opportunity in a country where there’s only been one initial public offering that size or larger since Softbank Corp.’s mega listing in 2018. 

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SpaceX has earmarked 30% of the $75 billion IPO for individual buyers, setting off a scramble for what many see as a generational investment opportunity, regardless of the recent selloff that’s rocked US technology shares. 

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The deal is multiple times oversubscribed and is expected to stop taking orders from institutional investors on Wednesday in New York, people familiar with the matter have said. In a sign of the overwhelming demand, banks are trying to prevent traders from placing multiple orders on different platforms. 

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For Japanese investors, like 20-year-old Getto Hagiya, it’s just an opportunity too good to miss.

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“The odds of winning shares look slim, but if I’m successful it would really feel like hitting the jackpot,” Hagiya said by phone. “I have huge respect for Elon Musk and see limitless opportunities for the space business.”

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Japan is the only country in Asia and one of a few around the world, along with Australia, Canada and parts of Europe, where retail investors are able to directly buy into the SpaceX IPO. Based on the company’s target, Japanese investors will account for about 3% of the total fundraising and likely a bigger slice of the retail portion, according to Bloomberg calculations. Institutions can also join the tranche, but most are expected to be distributed to retail investors, given some mandates restrict Japanese stock managers from buying foreign equities.

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But some potential buyers remain cautious. Yujin Hwang, a local retail investor in her forties, is waiting for more information on SpaceX’s other businesses before jumping in.

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“I wouldn’t rush to buy immediately,” she said. “Instead, I would consider investing once the share price has stabilized to some extent. Many recent IPOs have become overheated on expectations right after listing and then undergone significant corrections.”

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In Australia, demand is also heating up among the retail base. Investors waited almost an hour on Monday in call center queues to reach broker Commonwealth Securities Ltd., with queries on SpaceX, according to local media reports. The company declined to comment, citing regulatory requirements.

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In other Asian markets, millions of retail investors have been shut out of direct participation. Underwriters have been told not to accept orders from Hong Kong and China, citing restrictions around the exports of critical technology, people familiar with the matter have said.

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In Korea, an army of “ants,” as they are known, has emerged as a market force and has famously piled into stocks like Musk’s Tesla Inc. In online communities, people are exchanging tips on how to gain exposure to SpaceX, such as buying big tech stocks that own a stake as proxies, or preemptively adding space-related US ETFs that will have to eventually add the shares.