Billionaire investor Bill Ackman proposes an unconventional SPARC structure for SpaceX’s potential IPO in 2026, linking it with Tesla to reward shareholders. Tesla, with a market cap of $1.58 trillion, offers a range of sustainable energy products and services. TSLA stock rose 15% YTD but faced safety concerns after a Model 3 investigation.

Ackman’s SPARC proposal would give Tesla shareholders priority access to invest in SpaceX, utilizing a unique investment vehicle that differs from traditional SPACs. The SPARC structure allows for investor-friendly terms and potential alignment with public investors, offering a novel approach to IPOs. Pershing Square secured approval for the SPARC structure in September 2023.

The SPARC proposal aims to democratize the IPO process, rewarding loyal Tesla shareholders with the opportunity to invest in SpaceX. Ackman believes SpaceX could raise significant capital by adjusting SPARs’ exercise price, potentially reaching up to $148.7 billion. The structure removes common IPO costs, making it an attractive alternative to traditional offerings.

Ackman’s proposal could revolutionize IPO processes by addressing key issues without relying on Wall Street banks, offering benefits to TSLA shareholders. However, the likelihood of SpaceX going public via the SPARC structure remains uncertain. Wall Street analysts are divided on Tesla, with a consensus “Hold” rating and a range of price targets.

Read more at Yahoo Finance: Bill Ackman Has a Bold Idea for a SpaceX IPO That Would Reward Tesla Stockholders. What Is a SPARC, and Does It Make TSLA a Buy Now?