In case you missed it, or have been living on the far side of the moon, SpaceX (NASDAQ:SPCX) will make its stock market debut on Friday (12 June). At $1.77trn, it will be the biggest listing in history.
SpaceX has priced its IPO at $135 per share. But investment banks involved — and UK stockbrokers — say that demand is insane, so I wouldn’t be surprised if the stock took off like a Falcon rocket. Up to 30% of shares have reportedly been earmarked for retail investors.
Yet that’s what makes me nervous. History is littered with blockbuster IPOs that dazzle before crashing back to earth.
Will SpaceX really be any different? Looking back at previous mega-IPOs might give us a better idea.
A quick trip down memory lane
If SpaceX is the most hotly anticipated IPO of the 2020s, then Facebook (now Meta Platforms) was the tech equivalent in the 2010s. Demand was through the roof for the rapidly growing social media company.
However, within a few months of listing in 2012, Facebook was trading 50% below its IPO price. It took about a year just to get back to par.
Two years later, we had Alibaba‘s IPO. The Chinese e-commerce giant set the global record at the time, raising $25bn. But after popping 38% on day one, the stock ended its first year down 30%, with a drawdown of 49% at one point.
Last month, Cerebras Systems went public in the biggest IPO of 2026 so far. Initially valued at over $56bn, the AI chipmaker’s market cap has fallen to $49bn after a share price pullback.
Pop then drop
According to Jay Ritter (aka Mr IPO), stocks that have popped on their first trading day went on to underperform the market by an average of 8.5% over the next three years.
Names like Snowflake and Coinbase rose sharply then fell away, unable to sustain the momentum over the following months.
Of course, I don’t have a crystal ball. But I do think SpaceX will head higher at first, especially if it gets fast-tracked into the Nasdaq-100 index.
History, however, suggests it will experience a significant correction within 12 months as pre-IPO investors are allowed to sell shares.
What about the longer term?
For the record, I have no intention of investing on Friday. In my experience, there’s usually a chance to invest later on at a better price if I’m patient. The data cited above echoes this.
Would I invest in SpaceX if it crashed? Potentially, as I believe communications network Starlink has a unique competitive advantage, based on the following things.
-
First-mover dominance, with almost 10,000 active satellites already in orbit.
-
Unlike paying rivals, Starlink launches satellites on SpaceX’s Falcon 9 rockets.
-
SpaceX is churning out 70 satellites per week.
-
Recurring revenue, with potential for software-like margins.
-
Starshield — the national security version of Starlink — is deeply woven into US intelligence and defence.
-
The mega-constellation could scale rapidly if Starship rocket succeeds.
