Why I Won't Be Buying SpaceX
InvestingTomorrow morning, the most anticipated stock of the decade starts trading. SpaceX lists on the Nasdaq as SPCX. Rockets. Mars. Elon. Starlink. This is the largest IPO in the history of money.
You're going to hear about it everywhere — your neighbor, the guy at the gym, every financial show on TV. Before any of that reaches you, let me walk you through what's actually happening underneath the story. Because the story and the mechanics are very different things, and the gap between them is where ordinary investors usually get hurt.
The hype is the product
The excitement you're feeling isn't an accident. It's the deliverable.
An IPO is a marketing event. A small number of shares, a famous founder, a generational story, a date circled on the calendar. Scarcity plus narrative plus a countdown. That's not an investment thesis — that's a movie premiere.
None of this means SpaceX is a bad company. It might be an extraordinary one. But "great company" and "great investment at this price, on this day" are two different questions, and the hype is engineered to make you forget the second one.
Only a sliver is actually for sale
SpaceX isn't selling the company. It's selling a slice. The offering raises about $75 billion against a valuation near $1.75 trillion — roughly 4 to 5% of the company. The other 95% stays with insiders, early employees, and the funds who bought in years ago at a tiny fraction of tomorrow's price.
Why does a tiny float matter? Price is set by supply and demand. Choke supply down to a few percent while demand runs hot, and you get wild, lurching volatility on relatively little actual trading. A small float is rocket fuel for a moving price. Fitting, I suppose.
"Speculative" isn't an insult here. It's a description.
In 2025, SpaceX grew revenue 33% to about $18.7 billion — genuinely impressive. In that same year it lost roughly $4.9 billion. The valuation works out to about 95 times sales — not earnings, sales. A mature blue-chip might trade at three or four times sales.
When you pay 95 times sales for a company losing $4,900,000,000 a year, you aren't buying a business. You're buying a belief that the future will be so spectacular it grows into a price that today has almost no relationship to reality. That belief might pay off. But let's call it by its name: that's speculation.
How IPO shares actually trade (read this part twice)
The "IPO price" you keep hearing — $135 a share — is not a price you can buy at.
That price is reserved for institutions, the banks' best clients, and insiders. Then the stock opens to the public, and that's the first price you and I can actually touch. By the time it reaches us, it has usually already jumped. Across four decades of data, the leading researcher on this — Jay Ritter, the man Wall Street calls "Mr. IPO" — found IPOs pop an average of about 19% above the offer price on day one. For a hyped name, it can be far more.
So: insiders get $135. The stock opens at, say, $175. The headline screams that SpaceX "soared." And the everyday investor, gripped by FOMO, buys at $175 or $200 — already well above what the smart money paid that morning. Essentially every share the public can buy trades above the insider price. That's not a glitch. That's the design.
Historically, investors who bought IPOs at their first-day close and held three years underperformed the market by about 20% on average. And for companies priced like SpaceX — high sales, sky-high valuation — of 14 IPOs that came public at more than 40 times sales, 12 underperformed the market over the next three years. SpaceX arrives at roughly 95 times sales, so the odds are even more stacked against them.
Who's the customer, and who's the product?
The people getting rich tomorrow already got rich — years ago, at prices you and I will never see. By some estimates, the IPO mints around 4,000 new millionaires. But for that paper wealth to become real money, someone has to buy it from them: a deep, enthusiastic market full of people who believe the story and don't think too hard about the price.
That market is us. In the architecture of an IPO, the everyday investor is rarely the one who gets rich — they're the liquidity, the exit ramp that lets earlier money cash out. As the old line goes: if you can't spot the sucker at the poker table, it's you.
Why I won't be buying SpaceX
I don't pick stocks. Not because I'm not allowed to — because it's a losing game. Over the long run, roughly 90% of professional, full-time stock pickers underperform low-cost index funds. If the pros with their fancy datasets and research teams can't beat the index, I’m not going to try.
FOMO is not a good investment strategy. The fear of missing out is a feeling, and feelings are terrible portfolio managers. There is no version of your financial life that is won or lost by whether you bought SpaceX at 6:31am on a Friday morning. The whole event is engineered around that one feeling — that this is the one you can't miss. We have the permission to have that feeling and not act on it.
If SpaceX becomes what the hype is selling, we win anyway. This is the part people forget. You already own a piece of nearly every great company in the world through your index funds — and the moment SpaceX is big enough to matter, the index will own it too, automatically, no hot open required. If the story is real, it grows into your portfolio over years, at sane prices, while you do nothing. The rockets are real. The engineering is historic. But your plan was never going to be made or broken by a single ticker on a single morning — and the moment it feels like it is, that's a great time to give me a call.
The rockets are real. The engineering is historic. But your plan was never going to be made or broken by a single ticker on a single morning — and the moment it feels like it is, that's a great time to give me a call.