Will SpaceX's blockbuster IPO soar or sputter? Past IPOs offer clues.
Summary
SpaceX plans to have the largest initial public offering (IPO) ever by raising $75 billion with a share price of $135. Past big IPOs often show stock prices rising at first but then falling below the initial price within a year, with notable risks for investors. SpaceX’s shares will also be included in major index funds, exposing many retail investors and retirement plans to the company’s stock.Key Facts
- SpaceX is pricing its IPO shares at $135 and expects to raise $75 billion.
- The company’s market value after the IPO is projected at $1.77 trillion, larger than Tesla’s and Meta’s current value.
- Historically, large IPOs see high stock price swings in the first year, with over half showing losses after 12 months.
- Analysis of 30 big tech IPOs found an average maximum loss of 55% in the first year.
- Research covering 9,200 IPOs since 1980 shows an average negative return of 21% over three years for first-day investors.
- SpaceX is allocating 30% of its IPO shares to retail investors, higher than the usual 5-10%.
- The stock will be included quickly in major index funds like Nasdaq-100 and Russell indices.
- Inclusion in index funds means millions of people will own SpaceX shares indirectly through retirement accounts and ETFs.
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