The largest IPO in history

SpaceX is expected to begin trading Friday, June 12, in one of the largest and most highly anticipated IPOs in history. The company is set to raise around $75 billion, selling roughly 555 million shares — which represent only 4%–5% of total shares outstanding — for a valuation of approximately $1.75 trillion.

Pre-IPO demand has been strong, driven by institutional and retail investor interest. Retail investors are expected to account for approximately 30% of IPO allocations, well in excess of most other IPOs, setting the stage for an active and potentially dislocated opening. The offering structure includes multiple share classes. Public investors will receive Class A shares, while insiders and early stakeholders will retain super-voting shares, preserving concentrated control after the listing. Elon Musk will retain ownership of more than 40% of the company and control more than 80% of voting power.

The initial free float is relatively limited because insiders and existing investors hold the majority of shares. This constrained supply, combined with elevated demand, increases the likelihood of heightened price volatility, particularly during the early trading sessions.

Importantly, index-inclusion dynamics are likely to drive additional near-term demand — and volatility — as passive funds and benchmark-aware investors move quickly to establish positions following the listing. Several major index providers, including FTSE Russell and MSCI, have granted SpaceX fast-track entry — notably, S&P Dow Jones has not. Despite the company’s large market capitalization, its initial index weight is expected to remain relatively modest due to float-adjusted weighting, which should temper the scale of these flows.

As is typical, lockup agreements are expected to restrict insider selling for approximately 180 days, with the potential for staggered or conditional early releases tied to performance thresholds. These lockup expirations represent future supply events that could introduce additional volatility later in the year.

Overall, the combination of record scale, dual-class structure, limited float, strong demand, and incremental index-driven flows sets the stage for significant near-term trading volatility, both at the open and in the months ahead as additional shares are introduced to the market.

Insights from the &Partners Investment Team

We believe the risk/reward is skewed to the downside by elevated valuation, extremely high expectations to justify that value, concentrated ownership, unusually weak governance, and expected volatility in early trading.

From a valuation perspective, SpaceX is coming to market at a very elevated multiple of revenue (approximately 90x, as it remains unprofitable). This valuation is extremely rich, even compared to high-growth AI and infrastructure companies. It is driven by anticipated value creation, particularly from Starlink’s future scale, margin expansion, AI adoption, space exploration, orbital data centers, and colonization of Mars. While these long-term opportunities are substantial, most remain unproven and are subject to execution, future technology, and capital-intensity risks.

We also want to set a practical expectation that trading could be choppy initially for the reasons discussed in this note. Nasdaq can impose trading halts, for example, if a stock’s price moves 10% or more in five minutes (T5), if there is extraordinary market activity (T6), or if there is an order imbalance or influx of orders (operational halt).

Stepping back, and as illustrated in the chart below, IPO performance tends to be highly uncertain. We caution investors against any “easy trades” that may be promoted in the popular media.

In summary, we believe the SpaceX IPO offers limited margin for error, with the stock likely to be highly sensitive to any signs of slower growth, pricing pressure, or execution risk. Investors should assess whether SpaceX, or any other investment, aligns with their long-term objectives and consult with their financial advisor.

&Partners Investment Team

The &Partners Investment Team brings extensive experience, deep market knowledge, and a disciplined approach to managing capital.

In keeping with our mission to bring institutional-quality research, analysis, and strategies to financial advisors and their clients, we make ourselves readily available to &Partners’ advisors. Our concierge orientation results in highly personalized investment advice that allows clients to better achieve their financial goals.

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Disclosures

The &Partners Investment Team is a group within &Partners composed of experienced asset management professionals. It serves as a resource for &Partners LLC and its financial professionals. The opinions of the &Partners Investment Team expressed herein: (i) may not reflect the individual opinions of the financial professional(s) servicing your account(s) and (ii) are not intended as, and may not be relied on in any manner as, legal, tax, or investment advice; a recommendation; or an offer or solicitation to buy or sell any security, financial product, or instrument, or otherwise to participate in any particular trading strategy. Past performance is no guarantee of future results.

The material has been prepared or is distributed solely for informational purposes and is not a solicitation or an offer to buy any security or instrument or to participate in any trading strategy. Please consult with your financial professional to determine what might be appropriate for your situation. Past performance is not indicative of future results.

Investment and portfolio diversification is generally recommended to reduce the overall volatility of a portfolio, but diversification will not assure a gain or prevent a loss (especially in declining markets). Diversification is generally more effective to reduce volatility when a portfolio includes investments that are uncorrelated or negatively correlated with one another from a performance and investment risk standpoint. Historical correlation of investment performance correlation (or lack thereof) is, by its nature, backward looking and does not guarantee the correlation (or lack thereof) will continue or remain constant.

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