SpaceX (SPCX) trades about 15% above its $135 IPO price, after an IPO that raised more than $85 billion and valued the company at around a trillion dollars, though the stock has at times fallen below that price. Starlink is the biggest revenue driver, with revenue up 65% and subscribers doubling, while the AI unit is the biggest drag, with AI capex of $15 billion in the latest quarter against total company revenue of about $7 billion. The author reviewed the 10 biggest U.S. IPOs from 1999 through 2023 and found that eight declined one year after debut, seven of them by double digits, with an average drop of 12%. The author says most investors should wait a few more quarters for earnings visibility, but would not avoid the stock solely because history suggests it may fall.
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Shares of Space Exploration Technologies (SpaceX, SPCX) crossed $170 on Oct. 5 before falling, opening at $164.70 on Oct. 12. After its public offering in June at $150 per share, the stock climbed to the $225 range on June 16 but then hit an all-time low of $104.83 on Aug. 3, amid fading IPO enthusiasm, fears of insider share sales, and concerns about spending and unprofitability. The article suggests long-term investors may view pullbacks as a buying opportunity, and cites the S&P 500’s annualized returns of 8% since 1950, 9% since 1980 and 6% since 2000 as evidence that holding through volatility can pay off.
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