SpaceX Is Worth $2.1 Trillion on Its First Day of Trading. Is That a Problem for Investors?
Written by Reuben Gregg Brewer for The Motley Fool -> The newsflow around the SpaceX IPO was intense, given its size and Elon Musk's involvement. The company is a leader in the space industry, but also has exposure to AI and telecommunications. The size of SpaceX in and of its
The newsflow around the SpaceX IPO was intense, given its size and Elon Musk's involvement.
The company is a leader in the space industry, but also has exposure to AI and telecommunications.
The size of SpaceX in and of itself isn't exactly an issue, but there are factors to consider before you buy it and for the market as a whole.
After all the buildup, the SpaceX (NASDAQ: SPCX) initial public offering (IPO) was perhaps a bit of a letdown. That's not necessarily because of the stock's performance, which was notable, but because the months of lead-up ended in an event that was completed in, basically, a day. It was sort of like waiting an hour for a roller coaster ride that only lasts three minutes.
Now that SpaceX is public, however, investors need to consider what it means. And one of the biggest issues is the company's massive size. With a $2.1 trillion market cap after just its first day of trading, it is already one of the world's largest companies . Here are a few things to think about if you own it, are considering buying it, or are just investing more broadly.
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For those who remember the dot-com bubble, the SpaceX IPO wasn't that impressive. Back at the turn of the century, it was common for IPOs to double in a day. SpaceX "only" saw a price increase of around 19%, with the IPO price set at $135 per share and the stock closing its first day at roughly $160.
From a functional perspective, the bankers who handled the IPO did a pretty good job pricing it. Still, by the end of the day, the company's market cap ballooned to $2.1 trillion. There are only six companies that are larger than SpaceX, and it is a pretty tight race with Taiwan Semiconductor (NYSE: TSM) for the sixth spot, as the chipmaker's market cap is $2.199 trillion.
