Chinese Investors Will Not Enter SpaceX’s IPO

SpaceX underwriters have barred investors from mainland China and Hong Kong from its $75 billion IPO, citing US restrictions on critical technology exports and national security concerns.

UC Hope

Investors based in mainland China and Hong Kong have been shut out of @SpaceX’s landmark initial public offering, with underwriters formally instructed to reject subscription orders from both jurisdictions.Underwriters Issue Formal Exclusion OrdersUnderwriters on SpaceX’s $75 billion IPO have been told not to accept orders from investors in Hong Kong and China, citing US restrictions around the export of critical technology. The lead banks overseeing the deal have passed that instruction to the broader underwriting syndicate, barring customers in both regions, including private banking clients, from placing orders due to regulatory and compliance risks.SpaceX aims to raise $75 billion in what would be the largest IPO globally, in a deal that would value the company at $1.75 trillion, immediately placing it among the 10 most valuable US-listed firms.Website and Marketing Materials Also BlockedSpaceX’s website and IPO marketing documents were not accessible in Hong Kong and mainland China, a Reuters review showed, a step that threatens to curb participation by investors there in what is expected to be the world’s largest listing. The company kicked off marketing roadshows on Thursday in New York, with IPO materials posted on its website and accessible to users in most major Asian markets, except for mainland China and Hong Kong.An “Error 1009” message was displayed when attempts were made to access the company website and marketing materials from both regions. Web security provider Cloudflare noted the most common explanation for the error is that the website owner has banned the country or region of the related IP address.Jeffery Chan, a managing director at Hong Kong’s Central Asset Investments, said the access restrictions could be due to SpaceX’s status as a defense contractor, adding that Chinese investors have not typically been a target market for the company.The move follows heightened scrutiny of the company. In February, two Democratic US senators urged the Pentagon to conduct an immediate review of SpaceX amid accusations that Chinese investors had secretly acquired stakes in the closely held rocket maker, citing potential national security risks.Spokespersons for the IPO’s lead banks, Bank of America, Citigroup, Goldman Sachs, JPMorgan, and Morgan Stanley, did not immediately respond to requests for comment.