SpaceX IPO: History Says Buy the Index, Not the Hype (And What That Means for Your Wallet)
SpaceX's record-breaking IPO is set for June 12, but history shows that even the largest IPOs tend to underperform the S&P 500 over the long haul. We break down the numbers, the risks, and why this financial lesson applies to managing your everyday expenses, too.
So, SpaceX is finally going public. On Friday, June 12, Elon Musk's rocket company will list on the Nasdaq under the ticker SPCX, with an initial price of $135 per share. That gives it a market capitalisation of $1.77 trillion, making it the largest IPO in history. The hype is, frankly, astronomical.
But before you rush to clear your savings account and buy a ticket to the moon, let's talk about what history actually tells us. Because, as a Canadian who has seen a few market cycles, I can tell you: the biggest IPOs often end up being the biggest disappointments.
The Numbers Don't Lie
Let's start with the good news. Between 2016 and 2025, over 1,100 companies listed on U.S. exchanges, and their stock prices increased by an average of 25% on day one, according to Jay Ritter, director of the IPO Initiative at the University of Florida. So yes, SpaceX stock might rocket higher initially. That's the fun part.
But here's the rub: the initial excitement fades. And it fades fast.
"However, the initial excitement eventually fades, and selling pressure increases as lock-up periods expire, giving insiders an exit strategy."
That quote from the Yahoo Finance article is the key takeaway. When you look at the 10 largest U.S. IPOs on record, they have collectively underperformed the S&P 500 by a staggering 96 percentage points since listing. Ninety-six. That's not a rounding error.
A Valuation That Defies Gravity
SpaceX is going public at 92 times sales. For context, Palantir Technologies is currently the most richly valued stock in the S&P 500 at 62 times sales. So SpaceX is 48% more expensive than the most expensive stock in the index. That's not a bargain; that's a gamble.
Morningstar analyst Nicolas Owens estimates SpaceX's fair value at $780 billion, implying 56% downside from its IPO valuation. Now, I'm not saying the stock will crash immediately. CNBC's Jim Cramer thinks the company's market value could rapidly climb to $5 trillion. But I'm a historian, not a gambler. And history says that buying into the hype at these levels is a losing proposition.
The Bottom Line for Investors
The lesson is crystal clear: rather than participate in the SpaceX IPO, you would almost certainly be better off buying an S&P 500 index fund. It's boring. It's predictable. But it works.
And this brings me to a broader point about personal finance. We often get caught up in the big, shiny opportunities—the IPO, the new gadget, the expensive subscription—and forget about the small, boring things that actually drain our wealth.
The Expenses You Forget to Claim
Think about it. How many small expenses do you forget to claim every year? A coffee with a client? A taxi to the airport? A software subscription you bought for a project? They seem insignificant in the moment, but they add up. In fact, the expenses you forget to claim could buy you an iPhone every year.
That's where ccLuca comes in. No IT. No enterprise software. Just you and your expenses, sorted. Snap a photo, get AI-extracted data in 3 seconds, generate expense reports instantly. It's built for individuals and small teams who don't have time to mess around with spreadsheets.
A Balanced View
On the other hand, I understand the appeal of the SpaceX IPO. It's exciting. It's innovative. It's the future. But as a Canadian academic, I've learned that the future is built on solid foundations, not hype. And the foundation of any good financial plan is tracking your money—every dollar, every expense.
So, by all means, watch the SpaceX IPO with interest. But don't bet the farm on it. Instead, focus on the small wins: track your expenses, claim what you're owed, and invest in boring index funds. That's how you build real wealth over time.
Source: The SpaceX IPO Is Just Days Away. History Says the Stock Will Do This When It...