Key Points
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SpaceX begins trading publicly on June 12 at a $1.77 trillion valuation and a $135 offer price — but retail investors will likely pay significantly more on the open market.
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With only 3% to 4% of equity being floated, thin supply and massive demand could drive a substantial first-day pop, similar to past mega-IPOs like Alibaba and Rivian.
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Despite the hype, SpaceX appears severely overvalued at these levels, and the stock may “come back to earth” after an initial surge — making it one to avoid for long-term investors.
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SpaceX (NASDAQ: SPCX) stock finally begins trading publicly on June 12.
At a valuation of roughly $1.77 trillion, the company will be larger than Elon Musk’s Tesla and big enough to rank among the 10 most valuable companies in the world on day one.
Will AI create the world’s first trillionaire? Our team just released a report on the one little-known company, called an “Indispensable Monopoly” providing the critical technology Nvidia and Intel both need. Continue »
The IPO offer price is $135 per share. So, $1,000 theoretically gets you about just shy of 7.5 shares (many brokerages today offer fractional shares).
But for most retail investors, that math is misleading. It’s unlikely you will be able to snag shares at the official price.
The $135 price probably isn’t your price
Most IPOs set a price range and let investor demand determine the final number, but SpaceX skipped that step and simply set a hard $135 — and that price applies only to investors who receive an allocation before trading begins.
If you’re reading this, that’s probably not you. That’s reserved for big institutions and Wall Street insiders.
Image source: Getty Images.
The rest of us have to compete on the open market, and given the appetite for SpaceX stock, it’s likely that the price on day one will be significantly higher.
The biggest IPOs rarely opened at their list price
If that happens, it won’t be the first time.
Here’s how the five largest U.S. IPOs before SpaceX priced and where they actually opened for everyone else:
| Company | Year | Offer price | Opening price |
|---|---|---|---|
| Alibaba | 2014 | $68.00 | $92.70 |
| Meta | 2012 | $38.00 | $42.05 |
| Uber | 2019 | $45.00 | $42.00 |
| AT&T Wireless | 2000 | $29.50 | $39.98 |
| Rivian | 2021 | $78.00 | $106.75 |
Source: Yahoo Finance Historical Data.
Four of the five opened above their list price. Of course, Uber actually debuted below its $45 offer price, a reminder that first-day pops are never guaranteed.
So what does $1,000 actually get you?
Obviously, I can’t tell you where the stock will actually list — the market will decide that on June 12. I will say that it would surprise me if the opening price isn’t closer to $150. If that’s the case, your $1,000 would get you just shy of 6.7 shares.
What’s more important, however, is what happens after that. And despite the hype, I don’t think SpaceX stock will stay there for long. I see the stock popping on day one and continuing to do well for the first month or so, but long term, I think shares will come back to earth.
Even if the stock lists below the offer price, I still see SpaceX as being severely overvalued, and I would avoid the IPO and its aftermath altogether.
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Johnny Rice has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Meta Platforms, Tesla, and Uber Technologies. The Motley Fool recommends Alibaba Group. 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.
