Thinking About Investing in SpaceX After Elon Musk Hit $1T? Read This First
SpaceX's IPO just made history. The company's offering, expected to fetch a $1.75 trillion valuation, has set off a frenzy among retail investors, and pricing the offering at $135 a share, per Forbes, pushed Elon Musk's net worth past the trillion-dollar mark for the first time — at least on paper.
The headlines are dramatic, to say the least. The investing decision underneath them is more complicated, and for most retail investors, it might not be the best time to jump onboard this rocket.
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The Demand Is Already Overwhelming
SpaceX's IPO is shaping up to be one of the most coveted trades of the year — though securing shares at the offering price will be a tall order for most investors. The offering has attracted quite a bit of investor interest; orders have come in at roughly twice the number of shares available, according to Reuters.
At up to $75 billion, SpaceX's offering would shatter records as the largest IPO in U.S. history. The company has also taken the uncommon step of reserving up to 30% of shares (around $22.5 billion worth) for retail investors, a departure from the institutional-heavy norm. It sounds like a win for the little guy, until you do the math. When a deal is already oversubscribed, a generous retail slice still leaves most individual investors empty-handed.
You Probably Won't Get the IPO Price Anyway
Historically, IPO stocks tend to surge on their first day of trading — but that opening pop mostly benefits those who got in at the offering price, which is rare for everyday investors. For high-demand deals, institutional buyers typically sweep up the vast majority of available shares. Even with SpaceX's unusually generous retail carve-out, most individual investors will likely find themselves buying on the open market after trading begins — at whatever premium has already built up above the $135 offering price.
Several major brokerages — including Robinhood, Fidelity and Charles Schwab — are participating in the offering and allowing customers to request shares ahead of the debut, according to Forbes. But having an account at one of these firms is no guarantee of an allocation. Getting in at the offering price will come down to timing, eligibility and no small amount of good old fashioned luck.
But if you’re trying to get hold of shares through other channels (special purpose vehicles, private funds, secondary marketplaces), it might mean holding an interest in a fund that owns the shares, not the shares themselves.
The Business Itself Is Worth Understanding Before Buying
Here's the part that gets lost in the trillion-dollar headlines. SpaceX has become the world's most successful space company, but it actually makes most of its money selling Starlink internet services, not from rockets or Mars colonization. While its long-term vision involves Mars, its current revenue engine is largely a satellite internet business — though the company's recent merger with xAI means AI infrastructure is now consuming the lion's share of its capital spending.
That's not necessarily bad — Starlink's growth has been substantial. The combined business, including the recent merger of xAI and X, reportedly did around $16 billion in revenue last year and could reach $20 billion or more in 2026. But at the IPO valuation, that would put the price-to-sales ratio at close to 100 — a high multiple even by tech standards.
What Happens After the Hype
Most IPOs underperform the broader market in the years after their debut, largely because companies are motivated to price their shares as high as possible on day one. SpaceX is no exception. If you like the company, keep it on the watchlist for now. Once the initial hype settles, better buying opportunities might emerge in the next few years.
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This article was provided by MoneyLion.com for informational purposes only and should not be construed as financial, legal or tax advice.
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