SpaceX float ‘could kickstart mega IPO access for British retail investors’
SpaceX’s use of the UK’s new public offer platform to raise hundreds of millions of pounds from British retail investors could encourage a wave of large US companies to follow suit, according to one of the brokers that orchestrated the deal.
The public offer platform (POP), introduced by the financial watchdog in January, was designed to allow firms looking to raise over £5m to sell shares to a wide investor base without the need for a regulated public market. Elon Musk’s SpaceX was the first to use the regime
Known for his outspoken criticism of Wall Street, Musk used POP to tap amateur investors in the UK and raised some $364m (£267.9m) throught the platform, according to reports.
While the satellite company’s share price has fallen 12.8 per cent since its IPO in June, its success using POP has suggested that other large firms will look to emulate the deal, according to Winterflood, the company that sold share on behalf of SpaceX to retail investors.
“When we first did SpaceX, my honest feeling was the POP regime would have a relatively limited use case,” Joe Winkley, head of corporate services at Winterflood, told Morning Wire. “I did not think it was going to be something where there’s a regular deal flow. I think I’m wrong.”
US sandwich chain Jersey Mike’s has since tapped UK investors through POP, a company Winkley admitted he did not expect to offer shares to amateur investors in Britain.
He now anticipates POP deals will come from other markets, including Europe and Asia. Many Brits are hoping tech heavyweights Open AI and Anthropic will also follow SpaceX’s lead.
“It doesn’t mean every big US IPO is going to include a POP, but I think…there will be more,” Winkley said. “I think there’s quite a strong pipeline.”
Industry concerns
Under UK listing rules, such fundraising would normally require the issuer to prepare a prospectus specifically for UK investors, meaning a company cannot use the regulatory documents acceptable in its domestic market in the UK.
Using POP allows companies to bypass this requirement, leading City figures to raise concerns that it may create a ‘two-tier’ system in which companies can list overseas but still reap the benefits of a UK retail offer without the need for a lengthy prospectus.
But Winkley disputed these claims, arguing the broker performs its own due diligence prior to completing an offer.
“It’s a slightly lower friction way into the UK. It’s certainly not light touch,” said Winkley.
“It was very clear from the FCA that we could not just turn around and say, look Goldman Sachs and Morgan Stanley are the biggest banks in the world and these lawyers, they’ve all done it and they’re all happy with the document. We had to do an independent diligence exercise.”
Winkley also brushed off concerns that bad actors could slip into the UK market through the regime, as allowing this to happen would also damage the broker and not allow them to raise money.
“It’s about how much money we can raise. If we bring a deal there’s a lot of work and there’s regulatory risk for us,” he added. “So we are going to be selective in terms of what we do.”
The IPO drought
The rise of POP comes as the London market continues to battle a prolonged IPO drought and wave of takeovers which have shrunk the market in recent years.
The London Stock Exchange has seen eleven £1bn takeovers so far this year while just 11 firms over £100m have listed since 2023, according to Peel Hunt.
Some have argued that POP is making it even easier for firms who see value in the UK to avoid listing in London while still tapping the country’s pool of capital.
But Winkley argued the UK’s domestic retail investor base would back domestic deals if recognisable names were listing here.
“A lot of these questions around POP and everything else will fall away if you bring them the right stories. I think you’ll see the UK retail [investor base] responding,” he said.
He admitted that while the POP regime has brought Winterflood new opportunities, the broker’s main focus remains on the domestic market.
“We are a very UK focused business. Ultimately we would still love to see us working on the UK IPOs,” he added.