Key Points
On June 12, Elon Musk’s Space Exploration Technologies (SpaceX)(NASDAQ: SPCX) entered the record books as the largest initial public offering (IPO) in Wall Street’s storied history. It nearly tripled the capital raise of the previous recordholder, Saudi Aramco, and made a brief run after its debut to a nearly $3 trillion market cap.
Given that SpaceX combines two of the largest addressable opportunities, artificial intelligence (AI) and the space economy, retail investor demand for shares has been otherworldly. Additionally, CEO Musk has a track record of delivering outsize returns with his other trillion-dollar company, Tesla.
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Image source: Getty Images.
With parabolic sales growth forecast over the coming years, one Wall Street analyst foresees SpaceX reaching $401/share and becoming a $5.3 trillion company by the end of 2027. But historical precedent has a much better track record of forecasting price targets than Wall Street analysts.
History says this will be SpaceX’s price target within the next year
Trying to guess which direction a hot IPO will move in the short term is incredibly difficult. Retail investor hype and emotion are virtually impossible to quantify.
However, in the weeks leading up to SpaceX’s debut, the research team at Truist Financial released a data set detailing the performance of 30 of the most-hyped, tech-driven IPOs over the last 14 years. Beginning with Facebook (now Meta Platforms) in May 2012, Truist tracked the returns of these brand-name IPOs at various intervals, up to 12 months.
Moral of the story-do NOT chase hot IPOs
Year-1 average drawdown = 55%
Year-1 median drawdown = 54%Table: Truist pic.twitter.com/xt864JD4Xh
— Puru Saxena (@saxena_puru) June 3, 2026
But the most telling statistic from Truist’s data set is the maximum year-one drawdown for each of the 30 IPOs. On average, these tech-centered IPOs endured a peak-to-trough drawdown of 55% within the first 12 months after their debut, with 11 of 30 plummeting 64% to 90%.
If the assumption is made that SpaceX put in its high last week at $225.64 per share, a 55% maximum drawdown would take it to $101.53 within the next 12 months.
Image source: Getty Images.
SpaceX shares can plunge a lot further than historical precedent suggests
While a $101.53 price target would effectively align with history, SpaceX may be an outlier for one of Wall Street’s biggest year-one drawdowns.
Thanks to amended index inclusion rules for the Nasdaq-100 and U.S. Russell Indexes, coupled with SpaceX’s historically low post-IPO float, it’s likely to receive an index fund-buying boost during its first few weeks as a public company. But once this initial buzz fades, it could be a long ride down.
SpaceX’s staggered lockup period for insiders may prove disastrous for retail investors. Instead of a typical 180-day lockup period where insiders can’t sell their shares, SpaceX provides several time- and performance-based unlock periods to allow insiders to dump their shares on retail investors.
Great look at the SpaceX shares unlock schedule as well as the potential passive buying schedule from @JSeyff @FrancisSharoon Depending on the early post-IPO returns, this could really play with and disperse the returns of “passive” funds (which is why there’s arguably no such… pic.twitter.com/KOuEkJlngF
— Eric Balchunas (@EricBalchunas) May 28, 2026
Musk’s AI and space company also brings a historically unsustainable valuation to the table. Companies at the forefront of game-changing technologies haven’t been able to sustain price-to-sales (P/S) ratios above 30 for an extended period. SpaceX ended the previous week at a P/S ratio of almost 131!
Furthermore, SpaceX’s prospectus notes that the company will issue debt and equity to expand its AI data center infrastructure and for mergers/acquisitions. It’s a virtual guarantee that retail investors will contend with share-based dilution.
History says SpaceX is headed for $101.53 — but I believe this is a generous target for an unproven and unprofitable company.
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Sean Williams has positions in Meta Platforms. The Motley Fool has positions in and recommends Meta Platforms, Tesla, and Truist Financial. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
