SpaceX's debut has known unknowns
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SpaceX shares are set to start trading Friday, and what to expect is anyone's guess: There's no such thing as a typical Day 1 for an initial public offering.
Why it matters: This one will be the biggest IPO of all time, raising $75 billion and minting thousands of new millionaire SpaceX employees — and potentially the world's first trillionaire in Elon Musk.
Follow the money: Sometimes when a stock debuts, its price "pops," as happened with Figma, Airbnb and DoorDash, as you can see in that chart.
- Seems cool, but many would argue that it's actually a sign that the company didn't price its shares properly: It sold too cheaply.
- Investors who were able to get shares at the offer price won big, but the company, well, not so much.
- Plus, ordinary investors — "retail" — who are salivating for this IPO, often don't get that early bite of stock and wind up having to buy on the open market after the initial pop and don't see a benefit.
Reality check: The first day isn't necessarily that important.
- Look at what happened back in 2012 to Facebook — its IPO was legendarily disastrous.
- Technical glitches delayed its debut and created confusion among traders. The only reason the stock didn't end down for the day is because the company's underwriters propped it up.
- In the long run, of course, lots of folks who held on got rich. Now called Meta, the company is among the most valuable in the world.
The bottom line: Hype meets reality when SpaceX debuts in the public market, but the company's story is only just beginning.
