In early April 2026, SpaceX officially filed for its initial public offering (IPO) with the Securities and Exchange Commission. This much-anticipated move has stirred excitement among investors, especially considering the company’s reported valuation aspirations. SpaceX is aiming for an initial valuation of $1.75 trillion, which would not only make it the largest IPO in history but also place it among the ten most valuable public companies worldwide.
In the lead-up to the IPO, SpaceX plans to host an IPO roadshow in June 2026. This will give executives the chance to pitch the stock to institutional investors, setting the stage for a potential public listing later in the summer. However, investors should approach this opportunity with caution. Historical trends suggest that stocks launched with lofty valuations often experience significant declines soon after their debut.
According to research by Jay Ritter, a key figure in the study of IPOs, stocks that have gone public from 1980 to 2025 have seen an average return of 19% on their first day of trading. Yet, this initial excitement tends to dissipate, especially for companies aiming for high valuations like SpaceX. Many of these stocks underperform in the long term.
To illustrate the trend, let’s look at some of the largest U.S. IPOs in recent years and their performance:
| Stock | 3-Month Return (Post-IPO) | 12-Month Return (Post-IPO) |
|---|---|---|
| Alibaba | 18% | (30%) |
| Meta Platforms | (50%) | (31%) |
| Uber Technologies | (4%) | (21%) |
| Rivian Automotive | (36%) | (67%) |
| DiDi Global | (45%) | (79%) |
| United Parcel Service | (16%) | (15%) |
| Coupang | (22%) | (65%) |
| Arm Holdings | 29% | 189% |
| Average | (13%) | (12%) |
This table highlights that many of the largest IPOs have not only seen a decline in their stock prices in the months following their launch but have also ended up trailing the broader S&P 500 index significantly.
For instance, Alibaba has increased by only 36% since its 2014 IPO, which is dramatically lower than the S&P 500 performance over the same period. Rivian, on the other hand, has plummeted by 84% since going public, showcasing the risks associated with investing in high-valued IPOs.
With SpaceX’s imminent IPO, potential investors are advised to remain cautious. While there may be an initial surge in stock price due to market enthusiasm, historical data suggests that long-term results are generally poor for stocks launched at high valuations.
In summary, investors may be better off waiting for a more favorable buying opportunity after the initial excitement of the SpaceX IPO subsides. Keeping an eye on market trends and historical performance can help in making informed investment decisions.
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