FREE NEWSLETTER
Go to main Forum page »
Judging by all the buzz on social media—and the emails from the youngsters in my family—the SpaceX IPO appears to be the first investment in history with no downside.
The case seems straightforward:
Like flag pins and patriotic hats, accepting SpaceX’s invitation to participate in the IPO appears to be an American civic duty. Possibly world peace.
I’m just delighted a generation of investors will have the opportunity to learn valuable lessons about margin of safety, the madness of crowds, and loss aversion —assuming, of course, that those concepts haven’t been rendered obsolete by rockets.
Great Question. I remember when Facebook came on the scene, this could be similar, but probably not. At opening it barely made the strike price of $38 in 2013, then by September down to $18, then took 14 months from start to get back to $38. By early 2014, it crossed $60; by 2018, it was over $200 and in 2025 to $700. So, my take is buy, just a few shares at the beginning, if it goes down wait. However, this one could be much different, because Elon Musk has a mystique about him. If it appears to be going up, up, then buy on the up, but do not get crazy. It really only takes one share over time. Example McDonadls stock in 1968 was $60, today that one share is worth $136,000!! Enough said.
I read an article yesterday that said the IPO is extremely overpriced. Best to wait to buy
I’ve been wondering this week if the Space X IPO along with those coming from Anthropic and OpenAI will mark the peak of a manic market cycle sort of like the AOL/Time merger in Jan, 2000. Underlying all this is the passive bid which keeps powering the market higher, higher earnings revisions, etc., so it’s impossible to call the top. That said, I don’t want to be exit liquidity for all the VCs that bought into Space X. My hunch is that Space X will see a pop after the open and then a decline down to a more reasonable valuation as those who can sell will. That’s my 3 cents, which is up from 2 cents due to inflation. 😊
If you are an index investor, your particular index fund may or may not invest in this security at the IPO. Vanguard funds will probably invest after 5 days. The S&P 500 will consider after a year of trading, if profitability requirements are met. The devil is in the details.
A good article from Morningstar explaining the Space X impact on index funds.
The SpaceX IPO: How Index Funds Are Adapting | Morningstar
I had an article covering this published a few months ago.
https://humbledollar.com/2026/03/3-trillion-sp-500-gatecrashers/
The typical index fund only includes the free-float weighted portion of the stock available to general investors. The estimate I have seen for Space X is that only 3%-4% of the initial IPO will be free-float.
Here is a Wikipedia explanation of free-float that I found useful.
I will own a small sliver of Space X soon, just like every stock in the index. A good example is the Vanguard Total World Stock ETF (VT) is free float adjusted.
One topic I’ve seen discussion on (e.g. https://www.morningstar.com/funds/spacex-ipo-how-index-funds-will-adapt) is how the different index funds are modifying their “buy rules” for the big IPOs (OpenAI, Anthropic, SpaceX). If you hold an index you’re going to buy some of these companies within a few months after the IPO – but only a very small percentage at first.
IPOs are too exciting for me.History is littered with the names of once dominant companies.
The salesman promised that the Commodore 64 was the last computer I’d ever have to buy. I should have bought the Tandy.
I am actually going to buy but not until the first financials come out after the IPO. I expect their stock price will be down quite a bit after 3-6 months once the hype is over.
Figure I’ll put in apx 2% of my investable assets, so just enough to dream without sacrificing too much. Put it in my Roth account and it will sit there the next 20-30 years and if it does real well my boys will be happy!
We were planning to look after the hype is over also. We would buy in our “play” account, and not many shares, maybe even just the shares for the grandchildren I talked about below. Some of the excitement I wrote about was that Space X is a way for regular people like us to invest in space besides our tax dollars with NASA. Although, idk if the price will ever be something we could afford? It will be fun to watch. Chris
Multi-billion dollar losses are a downside for me. To believe in the valuation, you have to believe in Musk’s path to profitability.
This sort of stuff is why we will always stick with index funds. Getting tied up in all the hype around the SpaceX IPO would just hurt my brain.
Overvalued … 6 months from now it will be lower than the IPO
I can think of one downside: Musk.
I can think of one upside: Musk.
He is the most creative diverse innovative genius of our time, or maybe of all time.
That being said, I have two reasons I will not be invest. (1) The valuation and hype make it unreasonable to me, (2) I only own broad market index etf’s so if or when they add it to their portfolio I will own it
Buy just one share, your Grand kids will benefit. If you feel Musk will make the difference, by 5 shares for each, does not matter if buy them day one or day 51, just do it.
I will NEVER invest in a Elon Musk company. His behavior is too erratic. Case in point apparently now he has lost interest I Tesla, but continues to be the CEO. Vanity possibly the reason?
Please explain.
I think a lot of the complaints about Musk are more political than rational. I love the dude no matter what his views are.
Take a look at some of the WSJ stories about Musk in the last year and see what you think.
I think he’s the Nikola Tesla of our time. As a shareholder I support him 100%
Good for you. You should then be willing to invest a sizable chunk, say $100k to $1m, in SpaceX.
Precisely. Why let boring, industrial-age concepts like ‘revenue models’ or ‘margin of safety’ ruin a perfectly good hype train? It’s truly heartwarming to see a new generation get their own version of the late ’90s dot-com era, dreaming of valuations that defy the laws of physics.
Back then, they called it ‘The New Paradigm’ to explain why profits didn’t matter anymore. Today, we have ‘AI somehow’ and Mars. Anyone bringing up historical market cycles just needs to chill out dude: or as they say now, touch grass, it’s all sweet.
Clearly, this time it’s totally different, because this time, the spreadsheet has AI powered rockets on it.
I am very excited about this, but told Spouse I am not sure we could afford Space X. It is something totally new to invest in. I wish Mr Musk would have a program where we could buy a share for each of our grandkids and they would send the physical stock certificate to frame. Chris
Amen. Just buy that one share, it will be all you need for your grands. Get a picture of the share, and frame that instead.