SpaceX Is Set to Start Trading Friday in What Could Be the Biggest IPO in History. Here's What Market History Says About Buying Day 1.
Written by Daniel Sparks for The Motley Fool -> SpaceX is expected to begin trading on the Nasdaq on Friday at an initial market value of about $1.77 trillion. The market's biggest IPOs have usually popped on day one, but most later traded below their offer prices. Lockup expi
SpaceX is expected to begin trading on the Nasdaq on Friday at an initial market value of about $1.77 trillion.
The market's biggest IPOs have usually popped on day one, but most later traded below their offer prices.
Lockup expirations have been a recurring source of pressure on newly public stocks.
SpaceX is set to make stock market history. The rocket maker turned satellite internet and artificial intelligence (AI) conglomerate is expected to begin trading on the Nasdaq on Friday, June 12, after selling about 555.6 million shares at a fixed price of $135 apiece. It will trade under the ticker SPCX. The $75 billion raise would be the largest from any initial public offering (IPO) ever -- more than double the $29.4 billion record set by Saudi Aramco in 2019. And it gives the company an initial market value of about $1.77 trillion, instantly one of the most valuable companies in the world.
Anticipation among everyday investors seems just as outsized. SpaceX 's prospectus names several retail brokerage platforms that will make shares available at the offer price, an unusual arrangement at this scale. Everyone else who wants in on Friday will pay whatever price the market sets at the open.
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So, what does history say about buying a debut of this magnitude on day one? Here are three lessons from the market's biggest IPOs.
Big IPOs usually rise on their first day. But the headline gain is measured from the offer price, not from the price most investors can actually get. When Chinese e-commerce giant Alibaba went public in 2014, its shares were priced at $68 and opened at $92.70 before closing at $93.89 -- a 38% first-day gain. That pop, however, went almost entirely to investors who received shares in the offering. Anyone who bought at the opening trade earned barely more than 1% by the close.
