SpaceX IPO is Here, and Retail Traders are Buying: Will SPCX Rise or Crash?

Key Insights

• The much-anticipated SpaceX IPO is coming on Friday this week.
• Retail investors have placed orders worth $50 billion.
• History shows that the stock will surge and then retreat.

Speculation surrounding a future SpaceX IPO continues to dominate investor discussions as market participants evaluate what could become one of the largest public listings in history. Expectations of a valuation above $1.7 trillion have fueled interest from retail traders, institutional investors, and index funds.

While SpaceX has not confirmed an IPO date, analysts have started assessing how the stock could perform if the company eventually enters public markets.

SpaceX IPO is Drawing Retail and Institutional Investors

The biggest event in the financial services industry will happen on Friday, June 12, when SpaceX launches its highly anticipated IPO. The company plans to raise $70 billion at an over $1.78 trillion valuation.

However, media reports suggest that the company will raise more money than that. According to Bloomberg, the IPO is four times subscribed as investors seek exposure to a company at the confluence of space technology and artificial intelligence.

The company’s space business consists of its launch services and Starlink, which provides internet connectivity worldwide. Some analysts believe that this segment will become increasingly important to the data center industry as the company begins deploying data centers in space.

SpaceX also owns xAI, which houses X, formerly known as Twitter, and Grok, one of the most popular alternatives to ChatGPT and Claude.

Retail investors have placed over $80 billion in orders for the shares, which likely explains why risky assets like Bitcoin ETFs have shed assets in the past few months.

Index funds have also rushed to place these orders, a move that may make it hard to access shares because SpaceX is only offering a small portion of its shares.

Analysts Remain Divided on SpaceX Valuation

SpaceX has attracted mixed views from Wall Street analysts. Jim Chanos, one of the best-known short sellers, warned that the stock could decline after the IPO.

Still, many investors question that view because Chanos also maintained a bearish position on Tesla during its prolonged rally.

Morningstar analysts also argued that the company carries an excessive valuation. They estimated its fair value at less than $1 trillion.

Other analysts remain bullish. They cite SpaceX’s growing market share across several industries and its leadership in satellite internet and launch services.

Analysts also point to the Elon Musk premium. Tesla reached a trillion-dollar valuation despite intense competition from larger automakers.

IPO History Suggests Volatility Ahead

History shows that many newly listed companies rally shortly after their IPO before retreating. Early investors often take profits once the initial excitement fades.

Cerebras offers a recent example. The Nvidia competitor surged after its May IPO and climbed above $386. The stock later lost momentum and now trades near $227.

Figma followed a similar path. Adobe once attempted to acquire the company for $20 billion. After going public, Figma shares climbed to $50 within weeks. The stock later dropped to $18.92.

The same pattern appeared in the cryptocurrency sector. Circle Internet Financial surged to $300 after its IPO. A few months later, the stock fell to $49.

History does not always repeat itself, but market behavior often follows familiar patterns. SpaceX shares could surge as investors fill existing orders and compete for limited supply.

The stock may retreat later as traders lock in gains. Such a move could create opportunities for short sellers.

Options traders may prefer put contracts because borrowing shares could prove expensive due to the company’s limited public float.

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