Wall Street is bracing for one of the most highly anticipated initial public offerings (IPOs) in years when SpaceX makes its stock market debut, which could happen as early as June.<\/p>\n
Check Out: Investor Who Made $20 Million on Nvidia Stock Reveals the Next Big Opportunity<\/a>\u00a0<\/p>\n Read Next; 4 Safe Accounts Proven To Grow Your Money Up To 13x Faster<\/a><\/p>\n The IPO has already created a huge buzz \u2014 partly because a larger-than-normal number of individual retail investors will have access to the Elon Musk-led company when it goes public.<\/p>\n Before you decide to invest in SpaceX stock<\/a>, it\u2019s important to know some of the risks. Here\u2019s a look at three of them.<\/p>\n Also see how much of an investment in the SpaceX IPO is enough to get rich<\/a>.<\/p>\n Historically, IPOs<\/a> are heavily geared toward institutional investors rather than retail investors. Fidelity<\/a> estimated that the usual split is 90% institutional and 10% retail.<\/p>\n But as Yahoo Finance<\/a> reported, the SpaceX IPO could involve a \u201cpotentially massive\u201d 30% retail allocation.<\/p>\n This rush of retail investors could pose risks you might not normally see in an IPO, according to Chad Cummings, an attorney and CPA at Cummings & Cummings Law<\/a> who previously worked in finance and tax.<\/p>\n \u201cRetail investors clicking \u2018buy\u2019 on the morning SpaceX opens are not \u2018early\u2019 \u2014 they are the exit strategy for the venture capital and private equity shares, not to mention shares held by Musk himself and other employees,\u201d Cummings told GOBankingRates. \u201cMost folks thinking they are buying in the IPO are really buying in the secondary market at the then-current market price.\u201d<\/p>\n That price could rise quickly and then drop just as quickly amid all the activity. \u201cSpaceX could buck the trend, but investors should factor in the possibility of a 10% or larger drop,\u201d Cummings explained.<\/p>\n Keep Financial Literacy Month going \u2014\u00a0learn how the MoneyLion app helps you track, manage and move your money in one place<\/a>\u00a0<\/p>\n SpaceX\u2019s valuation could reach a whopping $1.75 trillion or more when the stock goes public, according to Bloomberg estimates cited by The Motley Fool<\/a>. Meanwhile, the company aims to raise $75 billion with its offering, which could push the IPO price above $600 a share.<\/p>\n Much of that price is based on the future potential rather than the current performance of subsidiaries like Starlink and xAI.<\/p>\n