Tomorrow’s SpaceX IPO Is Going to Be Insane. Retail Investors Are Trying to Buy the Whole Thing

The IPO market has spent years searching for a blockbuster capable of reigniting investor enthusiasm. Tomorrow, it gets one. SpaceX is scheduled to begin trading after raising $75 billion in what will be the largest initial public offering ever attempted. The scale is hard to comprehend. 

Investors aren’t just lining up to buy shares — they’re flooding the order book with amounts that rival entire stock market events from the past decade. Yet while the numbers are extraordinary, history suggests investors should separate excitement from investment discipline.

Retail Investors Are Driving This IPO

According to Reuters, SpaceX has now attracted more than $70 billion in retail investor orders alone ahead of its June 12 debut. The company is raising $75 billion, meaning individual investors by themselves could almost fund the entire offering.

Let’s put that into perspective. The previous record IPO was Saudi Aramco in 2020 at $29.4 billion. That means retail demand for SpaceX is roughly 2.4 times larger than the entire amount raised in Saudi Aramco’s record-setting IPO. The comparison is staggering.

Nothing remotely comparable has happened before. IPOs are typically dominated by institutional investors such as mutual funds, pension funds, and hedge funds. This time, everyday investors have become a major force behind the offering.

That’s because of Elon Musk, who has long stated his goal of giving individual investors greater access to high-profile public offerings. Reuters reports SpaceX plans to allocate at least 20% of shares to retail investors.

Institutions Are Piling In, Too

Retail investors are only part of the story. Earlier this week, Barron’s reported total investor demand was oversubscribed by four times the size of the offering. That’s a powerful signal that professional investors believe SpaceX deserves a place in their portfolios.

The company brings together several of Wall Street’s favorite themes:

• Commercial space launches
• Starlink satellite internet
• Artificial intelligence through xAI
• National security contracts
• Long-term Mars ambitions

Few companies can claim exposure to all of those markets simultaneously. That said, overwhelming demand doesn’t automatically translate into strong long-term returns.

Mega IPOs Have a Mixed Track Record

This is where investors should slow down. The fear of missing out is understandable. Many investors have waited years for the chance to own SpaceX. But IPO history offers a useful reminder that popularity and investment performance are not the same thing.

Reuters noted that large technology IPOs have historically struggled after their debut. Data from Nasdaq shows many major offerings eventually traded well below their initial peaks for years.

Granted, SpaceX is not a typical IPO. Its launch business dominates the commercial space market, and Starlink has become a major revenue engine. But investors are still being asked to buy into a company valued near $1.8 trillion. Reuters reports that valuation represents roughly 94 times trailing revenue. That’s a valuation that leaves little room for disappointment.

Key Takeaway

In short, tomorrow’s SpaceX IPO is already rewriting the record books. More than $70 billion in retail orders, a $75 billion raise, and hundreds of billions of dollars in total demand make this one of the most anticipated market debuts ever recorded.

But smart investors should remember that buying a great company and buying a great stock are not always the same thing. The enthusiasm surrounding SpaceX is real. The business is remarkable. The demand is unprecedented.

Ultimately, none of that guarantees attractive returns at a $1.8 trillion valuation. For long-term investors, patience may prove every bit as valuable as excitement.