[DigitalToday reporter Sang-yeop Oh] With U.S. space company SpaceX scheduled to list on the Nasdaq on June 12 (local time), interest among South Korean investors is growing. With direct subscription to IPO shares by South Korean retail investors effectively limited, companies holding SpaceX stakes, space and aerospace value-chain stocks and related exchange-traded funds (ETFs) are being cited as alternative investment destinations.

According to the financial investment industry on June 8, SpaceX set its IPO price at $135 per share, or about 204,000 won. The market sees SpaceX potentially selling about 555.6 million shares to raise $75 billion, with a post-listing valuation that could reach about $1.75 trillion. If realised, it would be the largest IPO in U.S. stock market history.

There are also factors that have stoked investment sentiment. SpaceX conducted a test flight of its next-generation spacecraft Starship V3 on May 22 (local time). The flight had some abnormalities, but was assessed to have achieved key goals such as simulated satellite deployment, re-entry and splashdown at sea.

With the listing approaching, interest also appears to be rising in Starship commercialisation, Starlink expansion, space data centres and its artificial intelligence (AI) infrastructure business.

Still, it is difficult for South Korean retail investors to directly subscribe to SpaceX IPO shares. SpaceX specified its method of providing shares to South Korean investors as a "private placement".

In South Korea, a securities registration statement must be filed to offer shares to 50 or more people, but under the current structure subscriptions are centred on professional investors.

In fact, $300 million of SpaceX IPO shares in the first subscription round held by Mirae Asset Securities at 8:30 a.m. on June 5 sold out within 1 minute of sales opening. The subscription was conducted for individual and corporate professional investors, and a second round for the remaining $200 million is scheduled for June 8.

In South Korea's stock market, companies with a track record of direct investment are being cited first. Mirae Asset Group has a history of investing in SpaceX from 2022 to 2023, and Mirae Asset Securities and Mirae Asset Venture Investment are known to have participated in the process. Aju IB Investment is also classified as a company that participated in an investment in SpaceX secondary shares through its U.S. local unit.

Korea Investment Holdings is also drawing indirect attention. That is because Korea Investment Management announced plans to participate in the SpaceX IPO and plans to include the allocated shares in its active ETFs and public funds.

In the physical value chain, Sphere, HVM, Intellian Technologies and Kenkoa Aerospace are drawing attention. Sphere is being cited as a company supplying materials for SpaceX launch vehicles.

HVM produces special alloys for space, aviation and defence, while Intellian Technologies is linked to low-Earth-orbit satellite communications antennas. Kenkoa Aerospace is connected to supplies of structural parts for launch vehicles and supply chains for aerospace raw materials.

Indirect investment through ETFs is also expected to expand. Korea Investment Management plans to include shares allocated through the SpaceX IPO in the "ACE US Space Tech Active ETF" and the "Korea Investment Global Space Technology & Defence Fund".

Hanwha Asset Management also said its "PLUS Space and Aerospace" ETF holds domestic space value-chain companies such as Sphere, HVM, Kenkoa Aerospace and Intellian Technologies.

In the industry, space and aerospace sector ETFs and defence-combination ETFs among South Korean ETFs are being cited as investment destinations that could benefit from the SpaceX listing. Still, domestic space and aerospace theme ETFs face constraints on including overseas unlisted assets, so it is common to expand the inclusion weight after listing. In that case, there may be a burden of chasing purchases at a higher price immediately after listing.

Tae-hyun Seol (설태현), an analyst at DB Securities, said domestic space and aerospace theme ETFs generally move quickly to expand inclusion weight after listing due to constraints on including overseas unlisted assets. He said they are exposed to the risk of having to chase buying at an overheated opening price on the listing day.

Post-listing share price volatility is also a variable. With investor interest high ahead of the listing, SpaceX could surge for 2 to 3 days immediately after listing, but profit-taking selling could also emerge at the same time.

External variables such as U.S. stock market and technology stock moves, U.S.-China trade conflict and European Central Bank (ECB) monetary policy could also have an impact.

Nam-jung Moon (문남중), an analyst at Daishin Securities, said SpaceX's share price volatility will sharply intensify immediately after listing. He said it could also quickly cool investor interest that had been high before the listing.

He added that trends in the U.S. stock market and technology stock prices, a prolonged U.S.-China trade conflict and concerns that monetary tightening could become a reality if the ECB raises interest rates could have a bigger impact than the SpaceX listing.