Issue #22 | Why Every Australian Owns SpaceX

ASX - Top 3 Winners & Losers
Deals Down Under - $14bn Pharmacy Takeover
Global Markets - SpaceX IPO
Other News - Aussie Politics, Sport and Culture

The ASX 200 had its best week since April, gaining 2.1% as Trump flagged a peace deal with Iran could be signed as soon as this weekend, sending Brent crude down 2% to a two-month low of $US88.60. Materials and banks led the charge, with copper and aluminium prices surging on the prospect of a Hormuz reopening. Gold steadied at around $US4,200 an ounce after falling more than 20% since the conflict began. Energy was the exception, with oil stocks sold off on the expectation that a peace deal would bring prices lower. Traders are also positioning ahead of the RBA's Tuesday decision, with the central bank widely expected to hold rates steady. 

This week’s best performers

Steadfast Group Limited (ASX:SDF) +30.05%

Steadfast Group surged 36.2% on Wednesday after the insurance broking network received a conditional takeover proposal from US-based Amwins Group and Dragoneer Investment Group, offering $6 per share in cash and valuing the business at around $7.7 billion in a full buyout that would take Steadfast off the ASX entirely. The offer is non-binding and indicative at this stage, meaning the acquirers haven't committed to anything yet and Steadfast's board still needs to respond. At $5.38, Steadfast still trades below its 52-week high of $6.66, leaving room for the board to argue the $6 offer undersells the business and for a bidding war if other buyers come to the table.

This week’s worst performers

Electro Optic Systems Holdings Limited (ASX:EOS) -14.95%

EOS fell this week after completing a $230 million capital raise, which included a $40 million retail share purchase plan that attracted nearly four times its original $25 million target. When a company issues a large volume of new shares, the price typically softens as that stock hits the market. Nothing fundamentally changed. EOS makes laser tracking and communications technology for satellites, and with SpaceX planning to deploy up to 42,000 Starlink satellites, the need for ground-based infrastructure to track and communicate with those satellites is growing fast. EOS is one of the very few companies in the world that can provide it. With 60-80% of its $726 million order book expected to convert to revenue in 2026 and 2027, the week's drop looks like a short-term reaction to share issuance rather than any change in the company's outlook.

Australia's biggest pharmacy chain just set its sights on one of Britain's most iconic retail brands.

Sigma Healthcare, the ASX-listed parent of Chemist Warehouse, this week confirmed it is in preliminary talks with US private equity firm Sycamore Partners over a potential acquisition of Boots, the UK's dominant pharmacy chain with roughly 1,800 stores and a 40% market share. The deal is being talked at anywhere between $10 and $14 billion, which would make it the biggest offshore acquisition by an Australian company since CSL bought Swiss drugmaker Vifor for $18.8 billion in 2022.

Sigma is not the only bidder. Canada's Weston family, which controls Loblaws and Shoppers Drug Mart, is also in the running, and a successful Sigma bid would kill off Boots' planned London IPO. Goldman Sachs is advising Sigma on the process.

The strategic logic is straightforward. Sigma has been building a UK presence quietly, buying a 75% stake in Greenlight Healthcare in May to pilot the Chemist Warehouse brand across 22 London pharmacies. Boots would be a quantum leap, giving Sigma instant scale, a trusted brand, and a platform across 11 countries. Chemist Warehouse co-founder Mario Verrocchi has been blunt about his view of Boots: "Boots used to be my hero. Today, I would say no way in hell. Boots have lost their way." That's not the language of someone buying a trophy asset. It's the language of someone who thinks they can fix it.

The risk is real too. Sigma has a $33 billion market cap and would need to raise significant capital to fund a deal of this size. The company has repeatedly cited Bunnings' failed UK expansion as a cautionary tale about moving too fast offshore. For a management team that built its reputation on discipline, a $14 billion bet on a struggling British retailer is a big ask.

On Friday, SpaceX listed on the Nasdaq in the biggest IPO in history, raising $75 billion from investors before a single share traded publicly. The stock opened at $US150, well above its $US135 offer price, and briefly hit $US176.50 before closing at $US160.95, putting SpaceX's market value at around $US2.1 trillion and making it the sixth-largest company in the US. Elon Musk, whose 42% stake is now worth over $750 billion, became the world's first trillionaire in the process.

The numbers are extraordinary. The valuation is harder to justify on fundamentals alone. SpaceX lost more than $9 billion across 2025 and early 2026, trades at a price-to-revenue ratio of roughly 112, and Morningstar put fair value at around $US780 billion, less than half the listing price. CFRA opened coverage with a sell rating. The bull case isn't about what SpaceX earns today – it's about whether Starlink, satellite infrastructure, AI and rockets can compound into something that dwarfs the current valuation over a decade.

For Australian investors, the exposure is more direct than it might seem. SpaceX has been fast-tracked for inclusion in the Nasdaq 100, meaning any superannuation fund with passive US exposure will soon hold SpaceX shares whether they chose to or not. CommSec also gave local retail investors direct access through the IPO, making this the first time everyday Australians could buy into a listing of this scale from their brokerage account.

The broader market impact is already being felt. Planet Labs fell 9% and EchoStar dropped 11% on Friday as funds rotated into SpaceX at the expense of smaller space and satellite names. The question now is whether the stock holds its price. With a small proportion of shares on the open market, an unprofitable business and a valuation built almost entirely on future optionality, early volatility is near certain. Whether it ends up being the railroads of the 21st century or the most expensive hype trade in history depends entirely on how much of Musk's vision actually gets built.

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