SpaceX launches a gigantic IPO

Invest now…or wait?

The biggest stock market story of June, and perhaps of the year, was the initial public offering of Space Exploration Technologies Corp. (NSD: SPCX) shares. It was the biggest IPO ever with about 500 million shares traded. The stock ended its first day at $160.91 (figures in U.S. dollars), sending the company’s value above $2 trillion. It was recently trading around $152.

A front-page story in a recent issue of The Wall Street Journal focused on three long-term employees who privately acquired a small number of shares for a few hundred dollars years ago as part of their compensation. Today they are all millionaires.

As for company founder Elon Musk, the deal makes him the world’s first trillionaire. Analysts estimate his holdings at between 40% and 42% of the company. Because of its share structure, Musk’s control of the company is higher than that. Estimates put it at between 80% and 85%.

The company is seen as being in the forefront of a range of profitable space activities. It was the first to reuse orbital rocket boosters, which were previously discarded after a single launch. The result was a significant reduction to launch costs.

Its Starlink business operates a series of satellites that provide internet access almost everywhere in the world for a monthly fee. It’s the major source of the company's revenue. Other sources of income are government contracts and commercial launch services.

Looking into the future, one of the company’s primary goals is to lead the colonization of Mars and perhaps other celestial bodies.

A long time horizon

So, should you consider buying shares? Only if you have a long time horizon. The price is expensive – the shares had an issue price of $135 and closed the day at $160.95. The company made a profit of about $8 billion last year, a drop in the bucket compared to the expected lofty IPO valuation. It's almost certain there will be wide swings in the share price as it starts to trade. It’s worth noting that about half of all New York IPOs trade below their opening price within the first year.

Then there is the Musk factor to consider. His great wealth shows he knows how to make money, but his erratic personality could lead to unusual decisions that may not always be in the best interests of minority shareholders.

Then consider the fact that space is a high-risk and in many ways still unknown business. Who knows what the first astronauts will find on Mars? A dead planet? A thriving underground civilisation? A treasure trove of minerals? Imaginations can run wild.

My view, and keep in mind I’m a conservative investor by nature, is to stand aside and watch. If the stock doesn’t trade below the IPO price at some point during the first year, I’d be astonished. Right now, I see a lot of hype and too much risk to take a flyer at this stage.

Gordon Pape is one of Canada’s best-known personal finance commentators and investment experts. He is the publisher of The Internet Wealth Builder and The Income Investor newsletters, which are available through the Building Wealth website.

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Notes and Disclaimer

Content © 2026 by Gordon Pape Enterprises. All rights reserved. Reprinted with permission. The foregoing is for general information purposes only and is the opinion of the writer. Securities mentioned carry risk of loss, and no guarantee of performance is made or implied. This information is not intended to provide specific personalized advice including, without limitation, investment, financial, legal, accounting, or tax advice. Always seek advice from your own financial advisor before making investment decisions.

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