Investors Scramble for SpaceX Pre-IPO Shares, Fraud Risks Loom

A number of investors are beginning to hunt for shares in SpaceX before the company owned by Elon Musk lists on the stock exchange. High interest is spurred by the potential for significant profits, but risks are increasing because transactions take place in an opaque market. Entrepreneur Tejpaul Bhatia is one of the investors who entered early. He claims to own a portion of SpaceX shares but cannot fully confirm his ownership. “I hope I haven’t been scammed,” said Bhatia. “I think not, but once again, there’s no way to know for sure,” he added. Direct access to shares is difficult because ownership is dominated by early investors and institutions close to Elon Musk. He then purchased shares through the secondary market. This market connects investors with brokers selling shares of private companies. SpaceX is now said to be preparing for an initial public offering with a valuation approaching $1.75 trillion or approximately Rp29,559 trillion. “This is the hottest IPO opportunity in history,” said Bhatia. This structure means investors do not always have direct shares in the company. “You rely on the counterparty in this transaction and their reputation,” said Mitchell Littman. “Whenever there’s hype around things like this, scammers will definitely emerge because they smell an opportunity.” High demand has made the investment structure increasingly complex. Shares can pass through several intermediaries, each taking a fee. “The situation is getting a bit loose,” said Namek Zu’bi. Zu’bi chose not to buy SpaceX shares due to concerns about fraud. “Many people will make a lot of money,” he said. “But you’ll also find many people who will be surprised or shocked” because they don’t actually own any shares. Investors often only see the entity above them in the structure. They cannot confirm whether shares at the top level truly exist. “That’s not enough to ensure the shares actually exist,” said an executive in the secondary market industry.