SpaceX rockets in record-breaking IPO

Good morning. Here’s what happened overnight and what you need to know today.

1.

Moon shot: SpaceX has officially floated on the Nasdaq, with shares closing 19.22% above its USD135 ($191.59) offering price of USD164.12, making Elon Musk the world’s first trillionaire. The rocket, satellite and AI company’s shares rocketed as much as 31% during its first day, and surged past USD2 trillion in market cap to become the sixth highest valued public company in the world. The float is the world’s largest, more than doubling Saudi Aramco’s record-setting 2019 IPO at USD75 billion. During an address prior to the float, founder Musk said: “If people had told me this was going to happen, I was like, man you must be smoking some really good crack, because I think this company is going to fail.” “I gave SpaceX less than a 10% chance of succeeding at all.” Retail investors delivered more than $100 billion of demand and now account for 20% of the stock’s allocation. Last year, SpaceX posted a loss of nearly USD5 billion. While the company is expected to be fast-tracked into the Nasdaq100, the S&P 500 will be sticking to its rules and will evaluate SpaceX for inclusion in about a year. (Nasdaq) (Bloomberg) (Reuters) (NYT)

2.

Peace rally: Wall Street closed higher while oil prices slid following hopes for a peace deal between the US and Iran. The S&P 500 rose 0.5%, the Nasdaq gained 0.31% as investors cheered SpaceX’s IPO, and the Dow increased 0.7%. At the start of the session, markets rallied following claims by US President Donald Trump that the US and Iran are on the verge of signing a peace agreement and that he would cancel missile strikes. Meanwhile, Brent crude fell 4.07% to USD86.75 while West Texas International dropped 3.23% to USD84.88 on Friday as the peace deal neared. US inflationary pressures have eased and traders are now expecting the US Federal Reserve to make its next rate hike next year. The latest US consumer sentiment data released on Friday showed a rise in early June for the first time in four months as lower fuel prices provided some relief. (Reuters) (Bloomberg)

3.

Diplomatic deal: A senior US official said on Friday there is an 80% or 85% chance an agreement would be signed and it would include a commitment by Iran to neither develop nor procure nuclear weapons and would reopen the Strait of Hormuz. The official said the US would ease sanctions on Iran and allow it to reintegrate into the global economy if all terms were met. However, Iranian Foreign Minister Abbas Araqchi said there would be no nuclear talks unless an interim deal was implemented. Araqchi said a memorandum of understanding had not been signed and could still change but posted on X that “The Islamabad Memorandum of Understanding has never been closer”. He noted the management of the strait would not return to the pre-war era and sovereignty belonged to Iran and Oman. Given the numerous times Trump has vowed an agreement is near, the US official suggested that this time was different. (Reuters) (Reuters) (Bloomberg)

4.

Capital challenge: Labor’s stronghold on the ACT has never been questioned until now as the seats of Bean and Canberra are being threatened by the independent movement. Despite Labor’s thumping election win in 2025, Bean’s incumbent MP David Smith clung onto the seat by just 700 votes. His challenger, Independent Jessie Price, is preparing a second shot at Bean in 2028 and told Capital Brief the anger at Labor she was picking up on is palpable. She believes some Canberrans tactically voted Labor in 2025 to avoid Anthony Albanese becoming a one-term prime minister but says the feeling that voting independent could lead to a Coalition government is no longer there. Meanwhile, the Voices of Canberra movement is moving to topple Labor’s Alicia Payne. The group has not settled on a candidate, but election analyst Antony Green believes the seat of Canberra also has the ingredients to fall. “The Liberal Party’s unelectable in the ACT, [and] it’s gotten worse since the last election,” Green told Capital Brief. “[So] if an independent ran in Canberra and ate up a lot of the Greens vote to finish second, they could win on Liberal preferences.” (Capital Brief)

5.

Drone development: Australia’s first local surveillance drone manufacturing capability was developed with the help of the Albanese government’s defence industry accelerator. But the winners of the accelerator — AMSL Aero, Boresight, and Grabba Technologies — said in a letter to Defence Industry Minister Pat Conroy the program had fallen short of “creating a genuine industrial capability”. The winners were awarded $6.6 million in procurement contracts and were given access to sell their drones to government agencies on an ad hoc basis. However, they said the volume of subsequent procurement contracts was not enough to give local component manufacturers the confidence needed to develop new products for the drone supply chain. AMSL Aero CEO Adriano Di Pietro told Capital Brief the challenge was not its engineering talent but rather procurement. “To hit those numbers, the ADF needs to transition from buying one-off projects to sustaining manufacturing ecosystems,” he said. But Beaten Zone Ventures founder Steve Baxter argues that a reliance on Australian Defence contracts can actually be a risk when their budget is comparatively tight and order volumes are comparatively lower. The letter also said that while the program created three capable designs it did not give assurance of consistency or volume. “Subsequently, the three industry partners cannot confidently hire staff, invest in manufacturing development, leverage volume discounts with supply chain partners or establish a program of iterative improvement,” the letter said. (Capital Brief)

6.

KPMG crisis: Macquarie has denied that it has any relevant information on KPMG’s whistleblower scandal after being probed by Labor Senator Deborah O’Neill. In new documents released by a parliamentary committee, Macquarie said it was “not aware of the whistleblower making specific claims in relation to Macquarie”. The whistleblower alleges Macquarie director Michelle Hinchcliffe was central to Macquarie’s audit tender process and was conflicted as she is a former KPMG partner. Dexus’ communications with the PJC were also released which said it had called for KPMG chair Martin Sheppard to attend a board meeting to explain KPMG’s response when the allegations were made. It also noted that while KPMG provided assurance on its standards and practices, it requested further information from the troubled consultancy regarding the matters raised and what actions had been taken in response. Other companies and bodies the PJC has written to for information include the ACCC, CPA Australia, APRA, the Institute of Public Accountants, Lendlease, Westpac, and CA ANZ. The Australian reported that since the scandal broke out in March, 31 contracts have been signed between the government and KPMG totalling $24 million. Earlier in the week, Greens Senator Barbara Pocock called for KPMG’s whistleblower hotline, FairCall, to be banned while the investigation played out. She told Capital Brief it was “astonishing” it had been running the RBA’s whistleblower service. Meanwhile, CA ANZ announced it is reviewing KPMG over its handling of confidential information and how it promotes an ethical culture. (AFR) (The Australian) (Capital Brief)

7.

Tax burden: Writing for Capital Brief’s Ideas Victoria University’s Spencer Kassimir said Labor’s 1942 centralisation of income tax laid the foundation for New Zealand to now beeline for Australian entrepreneurs to set up shop across the Tasman. Last month, New Zealand’s Finance Minister Nicola Willis called on all Australian businesses to build their dreams across the ditch as it has “no capital gains tax, very simple tax system, broad base and low rate”. Kassimir said before 1942 Australian states could set their own income taxes and could, as a consequence, offer meaningful incentives to attract investment, businesses and residents. “That competitive discipline is now gone, and New Zealand’s offer illustrates with considerable clarity the cost of its absence,” Kassimir said. “Under the Trans-Tasman Travel Arrangement, Minister Willis is able to play the role that Queensland or Western Australia or Tasmania ought to be playing with respect to each other, but cannot.” Kassimir also said Willis’ offer forces the premiers of the six states to ask themselves whether they are content to remain at the behest of the federal government indefinitely whilst a foreign finance minister fills the competitive vacuum that has been left empty for 80 years. He argues that no Australian state government can match Willis’ offer on comparable terms. (Capital Brief)

8.

On the Call: In this week’s On The Call podcast, John McDuling, Matthew Franklin and Harshdeep Kaur unpacked the week in politics. Newspoll had Pauline Hanson’s One Nation jumping ahead of Labor on the primary vote, confirming what the exclusive Capital Brief/DemosAU poll first revealed last month. Since January, poll after poll has captured One Nation’s rise. However, as Matthew said, it’s only in the last 10 days that the major parties have been responding to counter this momentum. Both parties have reasons to be concerned. It’s not just the Coalition bleeding votes to One Nation, but as the Capital Brief/DemosAU shows, some voters are shifting their preference from Labor to One Nation. The conversation also delved into the government’s capital gains tax reforms, announced over a month ago in the federal budget. What was meant to be a positive housing affordability story has turned into a political and policy headache. The startup and VC sector remains furious about the potential changes, and behind-the-scenes consultations are, as Matthew described, becoming chaotic. (Spotify)(Apple Podcasts)