{"id":690206,"date":"2026-06-07T18:12:12","date_gmt":"2026-06-07T18:12:12","guid":{"rendered":"https:\/\/www.newsbeep.com\/us\/690206\/"},"modified":"2026-06-07T18:12:12","modified_gmt":"2026-06-07T18:12:12","slug":"to-your-wealth-reaching-for-the-stars-what-to-know-about-the-spacex-ipo-lost-coast-outpost","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/us\/690206\/","title":{"rendered":"TO YOUR WEALTH: Reaching for the Stars — What to Know About the SpaceX IPO | Lost Coast Outpost"},"content":{"rendered":"

The
\nIPO of Elon Musk\u2019s SpaceX, ticker symbol likely SPCX, has investors
\nhoping that investment returns reach the stars.<\/p>\n

It
\nis crackin\u2019 up to be the largest IPO of all time, and the media is
\ngoing to be flooded with interviews and marketing in the weeks to
\ncome before it likely starts trading on Friday, June 12th.<\/p>\n

Reuters
\nreports<\/a> that the SpaceX IPO price will be $135 a
\nshare, and Bloomberg
\nreports<\/a> that the company has \u201calready received
\norders for more than the shares available.\u201d But that\u2019s not
\nnecessarily where it will open. Supply and demand will move the price
\nthe moment trading begins.<\/p>\n

The
\nAverage Joe retail investor will have unprecedented access to the
\nshares. Morningstar, a leading investment research firm, highlights<\/a>
\nthat while \u201c[m]ost IPOs allocate between 5% and 10% of shares to
\nindividual investors\u201d, SpaceX has \u201cdecided to reserve up to 30%
\nof its IPO shares\u201d for them. Of course, the institutions are there
\ntoo. The
\nWall Street Journal points out<\/a> that indexes like the
\nNasdaq will pick up shares sooner than normal, but the S&P 500
\nwill take much longer because it is not bending its rules to fast
\ntrack its inclusion.<\/p>\n

SpaceX
\nis not only democratizing IPOs, but it also has galactic goals. Its
\nmission pushes even farther, reaching spiritual and religious
\nheights: \u201cOur mission is to build the systems and technologies
\nnecessary to make life multiplanetary, to understand the true nature
\nof the universe, and to extend the light of consciousness to the
\nstars.\u201d (1)<\/p>\n

Wowzers.<\/p>\n

While
\nthe narrator of Star Trek spoke of space as the final frontier, this
\ncompany tells their investors that space \u201crepresents the largest
\neconomic frontier in human history.\u201d (2) They believe that
\nthey have \u201cidentified the largest actionable total addressable
\nmarket (\u201cTAM\u201d) in human history\u201d, clocking in at $28.5
\ntrillion. (3)<\/p>\n

Due
\nto the limitations of Earth, they \u201cmust build infrastructure and
\nindustries in space, expanding
\nhuman capabilities to improve life on Earth and to establish life
\nbeyond.\u201d (4) Mr. Musk is serious about this, as his
\ncompensation increases when the company establishes \u201ca permanent
\nhuman colony on Mars with at least one million inhabitants.\u201d (5)<\/p>\n

SpaceX
\nisn\u2019t just starships. It\u2019s artificial intelligence (Grok,
\ndesigned as a \u201ctruth-seeking AI model\u201d) (6), internet
\nservices (Starlink), and social media (X, the renamed Twitter, now
\nowned by xAI \u2014 which itself became a SpaceX subsidiary earlier this
\nyear). The company frames all these businesses and more under the
\ninfrastructure of space, connectivity and AI.<\/p>\n

Even
\nif some balk at the highfalutin mission and market, the bullish
\nargument for the company may launch if it achieves some of its aims.<\/p>\n

When
\nyou own this company, you may own the future in the stars and a wave
\nof new possibilities for humanity, but you also carry the potential
\nfor frightful content. For example, some of the AI \u2014 which itself
\nis both a gift of technological breakthrough and has some grim
\nimplications for our humanity \u2014 has \u201cSpicy\u201d outputs \u201cthat
\npresent heightened risks, including reputational harm, the generation
\nof potentially explicit content and misinformation or deceptive
\noutputs, potential nonconsensual or exploitative imagery,
\nintellectual property infringement, or content that could be viewed
\nas exploitative, harmful, harassing, abusive or discriminatory.\u201d (7)<\/p>\n

I
\ndon\u2019t tell people whether to buy, sell or hold stocks over the
\nInternet, but here is some research when considering SpaceX
\nspecifically and IPOs in general.<\/p>\n

According
\nto Jay Ritter\u2019s work at Warrington College of Business, since the
\n1980s, IPOs tend to pop big on day one and moderate over the first
\nyear. While IPOs spike an average of 18.9% on day one, the average
\none-year return is only 5.6%.<\/p>\n

More
\nrecently, the numbers are worse over the first year. Since 2011 the
\none-day pop is 23%, and the one-year return is -1.7%. Probably the
\nbiggest concern for the short to medium term investor is that even
\nafter three years, IPOs have underperformed the overall market by
\nmore than 20%.<\/p>\n

Translation:
\nmost of the time, one would have had a better 3-year performance
\nbuying a boring broad stock market index fund on the first day
\nthe IPO traded than buying the flashy IPO itself.<\/p>\n

If
\nyou want all the details, here is Ritter\u2019s chart (8):<\/p>\n


\n
\n
\n
\n
\n <\/a><\/p>\n

But
\nthis is not the average sized IPO, one might say. This is set to be
\nthe biggest ever.<\/p>\n

What
\ndoes history show about how some of the biggest IPOs have performed
\nover the first year? It\u2019s not good.<\/p>\n


\n
\n
\n
\n
\n
\n<\/a><\/p>\n

The
\ntop 10 US IPOs by size have averaged a decline of 26.8% over
\nthe first year. The best performing one, Visa, was still down
\n6.7% in its initial year.<\/p>\n

This
\ndoes not mean that this will occur for SpaceX, but it does put a
\ncautionary tale on the hype.<\/p>\n

Don\u2019t
\nget me wrong. Some of those stocks have turned out quite well over
\nthe longer term: Meta (Facebook) and Visa in particular. It\u2019s
\nanother reminder of something I\u2019ve written about before: timeframe
\nis a critical part of any investment decision.<\/p>\n


\n
\n
\n
\n
\n <\/a><\/p>\n

That
\nsaid, investors should gear up for big swings in price for Musk\u2019s
\nspace company. One writer picked up by Morningstar noted that: \u201cThe
\ncritical amplifier is float \u2014 at about 3.3%, where Tesla sees
\n10.0%-15.0% swings on milestone slips, we expect SpaceX to experience
\n20.0%-30.0% moves on equivalent catalysts.\u201d (9) Are you the
\nkind of investor who can handle potentially massive volatility?<\/p>\n

Is
\nthe possible valuation of the company at $1.75 trillion worth it?
\nAccording to Braden Dennis & Ryan Henderson, if you strip away
\nall costs and taxes and focus just on its core profitability, it will
\ntrade at more than 300 times EBITDA, which is significantly greater
\nthan similarly sized companies like Meta (Facebook), Taiwan
\nSemiconductor, and Amazon. (10) And guess what? As of June
\n5th, 2026, betting markets like Polymarket think the
\nvaluation may be even higher than that by the time it stops trading
\non IPO day. (11)<\/p>\n


\n
\n
\n
\n
\n <\/a><\/p>\n

One
\nof the biggest concerns for an early investor on IPO day (not an
\nearly investor pre-IPO; they are happier than clams and will be quite
\npleased to endorse it in the media), is that the day they start
\nbuying is not the entirety of shares that will be on the market
\nwithin the year. There is a risk of dilution. A few writers point to
\nthis problem:<\/p>\n


\nAssuming that the $86.25bn gets successfully allocated [an
\nextraordinary amount of stock for underwriters to place at the
\nbeginning], the market absorption is still not done. A wall of supply
\nis coming from those insiders that bought SpaceX at a fraction of the
\nprice.<\/p>\n


\nThe S-1 makes clear that Musk (approximately 42% economic interest -
\nwith 85% of voting power via super-voting Class B shares) is subject
\nto a normal lock-up but a lot of SpaceX insider stock joins the free
\nfloat remarkably quickly.<\/p>\n


\n\u201cEarly Release Eligible Shares\u201d have not been quantified in the
\ndraft S-1 but the lock-up schedule and triggers are set out below and
\nI have seen estimates that 80-90% of the non-Founder shares will be
\nfreely tradeable by November. (12)<\/p>\n

What
\nmight SpaceX do to Musk\u2019s other company \u2014 Tesla? Interestingly, there
\nhave been whisperings
\nabout a potential merger between the two<\/a>. If the IPO
\ndoesn\u2019t go well, might they merge? Does it make sense to put both
\ncompanies under one roof either way? After all, SpaceX has already
\npurchased hundreds of millions of dollars of Tesla products like
\nMegapack and Cybertruck. (13) Or might they thrive
\nindependently and benefit one another?<\/p>\n

Here\u2019s
\nwhat matters. I don\u2019t do market predictions. And with the cautions
\nabove, remember that fundamentals don\u2019t always drive price,
\nespecially with a celebrity CEO like Elon, who people tend to love or
\nhate.<\/p>\n

NYU
\nfinance professor Aswath Damodaran, who values the company about a
\nhalf trillion dollars below its expected price, says, \u201cNo matter
\nwhat your views are about the SpaceX IPO, positive or negative, there
\nis no denying that this company is a loaded bet on the AI\u00a0and
\nElon Musk, and while that may concern some, there are others who will
\nlook at Musk\u2019s track record with Tesla and feel the odds are in their
\nfavor.\u201d (14)<\/p>\n

The
\nquestion you should be asking is probably not what this company will
\ndo or not do on the first day or first year of trading, but how this
\ncompany or any other investment fits into your overall financial
\nplan.<\/p>\n

We
\ndo not believe investors should be asking what will help you get rich
\nquick, but what will help you live and leave a legacy.<\/p>\n

We
\nmay indeed reach the stars through corporations like SpaceX. The
\nstock may give stellar returns to its shareholders. But make sure you
\ndon\u2019t reach so high that you see stars from taking a risk
\nyou can\u2019t afford to take.<\/p>\n

###<\/p>\n

Brandon Stockman has been a Wealth Advisor licensed with the Series 7 and 66 since the Great Financial Crisis of 2008. He has the privilege of helping manage accounts throughout the United States and works in the Fortuna office of\u00a0Johnson Wealth Management<\/a>. You can\u00a0sign up for his weekly newsletter<\/a>\u00a0on investing and financial education or\u00a0subscribe to his YouTube channel<\/a>. Securities and advisory services offered through Prospera Financial Services, Inc. | Member FINRA, SIPC. This should not be considered tax, legal, or investment advice. Past performance is no guarantee of future results.<\/p>\n

###<\/p>\n

Sources:<\/p>\n

1.
\nSpaceX\u2019s S-1 SEC Document, page 1. Accessed
\nonline<\/a>.
2.
\nSpaceX\u2019s S-1 SEC Document, page 2. Accessed
\nonline<\/a>.
3.
\nSpaceX\u2019s S-1 SEC Document, page 11. Accessed
\nonline<\/a>.
4.
\nSpaceX\u2019s S-1 SEC Document, page 75. Accessed
\nonline<\/a>.
5.
\nSpaceX\u2019s S-1 SEC Document, page 235. Accessed
\nonline<\/a>.
6.
\nSpaceX\u2019s S-1 SEC Document, page 4. Accessed
\nonline<\/a>.
7.
\nSpaceX\u2019s S-1 SEC Document, page 30. Accessed
\nonline<\/a>.
8.
\nThe chart and the data in the above few paragraphs is from \u201cInitial
\nPublic Offering Updated Statistics\u201d (May 18, 2026), page 78.
\nAccessed
\nonline<\/a>.
9.
\n\u201cDoes SpaceX\u2019s Sky-High Valuation Make Sense?\u201d (March 9, 2026).
\nAccessed
\nonline<\/a>.
10.
\n\u201cSpaceX: Here\u2019s What You Get For $1.75 Trillion\u201d (May 24, 2026).
\nAccessed
\nonline<\/a>.
11.
\n\u201cSpaceX IPO Closing Market Cap\u201d (May 28, 2026). Accessed
\nonline<\/a>.
12.
\n\u201cThe Physics of SpaceX\u201d (May 24, 2026). Accessed
\nonline<\/a>.
13.
\nSpaceX\u2019s S-1 SEC Document, page F-56. Accessed
\nonline<\/a>.
14.
\n\u201cRevisiting the SpaceX Valuation: A Post-Prospectus Update!\u201d,
\nJune 4, 2026. Accessed
\nonline<\/a>.<\/p>\n","protected":false},"excerpt":{"rendered":"The IPO of Elon Musk\u2019s SpaceX, ticker symbol likely SPCX, has investors hoping that investment returns reach the…\n","protected":false},"author":2,"featured_media":690207,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[48],"tags":[79,193],"class_list":["post-690206","post","type-post","status-publish","format-standard","has-post-thumbnail","category-space","tag-science","tag-space"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/posts\/690206","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/comments?post=690206"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/posts\/690206\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/media\/690207"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/media?parent=690206"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/categories?post=690206"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/tags?post=690206"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}