SpaceX IPO countdown: Missing it is like missing Nvidia in 2009? Wall Street caught in a dilemma

The largest IPO in history is about to debut, but the controversy over its pricing is also unprecedented. Optimists compare it to NVIDIA's historic entry window in its early years; pessimists, using financial models, infer that the current pricing is more than half overvalued.

SpaceX is scheduled to list this Friday (June 12) on the Nasdaq under the ticker SPCX, with an issue price of $135, aiming to raise about $75 billion, and post-listing valuation reaching $1.77 trillion, setting a new global IPO record. Wall Street is embroiled in rare sharp disagreements over this stock—optimists see it as a once-in-a-generation entry opportunity, while pessimists believe investors are paying up to $72 of "option premium" for Elon Musk's grand vision.

Dan Ives, senior analyst at Wedbush Securities, characterizes this IPO as "an important moment for the AI revolution," and believes the probability of SpaceX merging with Tesla exceeds 80%, which could give rise to a Musk business empire encompassing the core assets of the AI ecosystem. In contrast, Morningstar analyst Nicolas Owens puts fair value at only $63 a share, 53% below the issue price, directly pointing out that the current valuation is mostly a bet on high-risk projects such as orbital data centers, rather than a reasonable pricing for realized business.

The impact of this IPO on the market is already being felt. On Tuesday, the Nasdaq index fell as much as 4% intraday before narrowing to a 1% loss at close; on Wednesday, it dropped nearly 2% intraday again, as concerns over super-large IPOs draining liquidity continue to ferment. Meanwhile, about 30% of IPO shares are allocated preferentially to retail investors—far above the typical 5% to 10%—combined with the Nasdaq 100 and Russell indices both fast-tracking rules to allow SpaceX rapid inclusion, the listing will deeply affect millions of ordinary retirement account holders invested in index funds.

Largest IPO in History: The Loss Narrative Behind High Growth

SpaceX will publicly offer about 556 million shares, just over 4% of total equity, raising about $75 billion, with a $1.77 trillion valuation, surpassing Tesla ($1.5 trillion), Meta ($1.4 trillion), and Berkshire Hathaway ($1.04 trillion).

The company’s fundamentals exhibit typical high-growth, high-loss features: 2025 revenues will reach $18.67 billion, up 33% year-over-year, but net losses for the same period will total $4.94 billion. Calculated at the issue price, the price-to-sales ratio is about 94 times.

The IPO is oversubscribed, meaning market demand exceeds what SpaceX is willing to sell at that price, so trading in the first days may see substantial price swings. Currently, SpaceX contracts on the Hyperliquid perpetual futures market trade at around $155, implying roughly 15% upside from the $135 issue price.

Bull Case: AI Infrastructure and Tesla Merger Speculation

Dan Ives’s bullish argument centers on SpaceX’s real progress in AI infrastructure. The company’s Colossus data center in Memphis, Tennessee integrates 220,000 top-tier Nvidia GPUs, providing more than 300 megawatts of AI computing power.

This hardware advantage has turned into substantial business contracts. According to previous listing documents, SpaceX signed a roughly $920 million per month AI compute leasing deal with Google; Anthropic agreed to pay $1.25 billion per month for exclusive access to Memphis Colossus 1’s compute resources until May 2029, totaling over $40 billion.

From a capital perspective, Ives notes SpaceX’s February acquisition of xAI converted Tesla’s $2 billion xAI investment into SpaceX equity, forming equity links between the two companies. He believes if SpaceX and Tesla ultimately merge, Musk will gain control over a broader slice of the AI ecosystem, achieving the so-called "holy grail" integration.

Bear Case: 53% Discount and Orbital Data Center Bets

Morningstar’s Nicolas Owens provides a completely different valuation framework. In a report published Monday, he values SpaceX at $63 per share, meaning about $72 of the $135 issue price is an "option premium" investors are paying for grand projects the company has not yet realized—and may never realize—including orbital data centers and Mars base plans.

Owens’s base scenario, assigned 50% probability, is "minimum viable product": the orbital data center is technically feasible but faces scale limitations, and SpaceX controls about 4% of global forecasted AI compute capacity, yielding about $47 billion in orbital AI annual revenues by 2035.

The pessimistic scenario, with 43% probability: the orbital data center is not feasible or can’t compete with ground-based solutions on cost. Owens suggests SpaceX could abandon the project around 2028, as Tesla abandoned plans for multiple small auto factories. If so, valuation would shrink substantially.

Only in the most optimistic scenario—where orbital data centers are not only feasible but also cost-advantaged over ground solutions—can the company’s valuation reach $1.97 trillion, corresponding to $154 per share, slightly above the issue price. Owens admits SpaceX may be the only company globally with the capability to achieve this, but scientific feasibility remains highly uncertain.

NYU finance professor Aswath Damodaran estimates enterprise value at $1.22 trillion, also conceding that $1.75 trillion is not wholly unfounded under extremely optimistic assumptions but presupposes SpaceX capturing substantial share in the enterprise AI market and rapid expansion for space launches over the next decade.

Historical Warnings: Large IPOs Often Face ‘Mean Reversion’

Though The Motley Fool and others note SpaceX currently emits a “double down” buy signal reminiscent of NVIDIA’s low-profile 2009 era, historical data is not favorable for mega-IPOs. Truist’s analysis shows the 30 largest tech IPOs over the past 15 years saw an average maximum drawdown of 55% in the first year, and over half of such companies posted negative returns a year after their debut.

University of Florida IPO expert Professor Jay Ritter’s broader study—covering more than 9,200 IPOs from 1980 to 2024—reveals that investors buying at first-day close averaged a market-adjusted return of -21% after three years. "The average IPO first-day gain is about 19%," Ritter told CBS News, "so the difference between buying at $135 or $165 can be dramatic for eventual returns."

Motley Fool statistics show that among 1,724 stocks listed from 2011–2024, the weighted average return one year after IPO is -1.7%; and for ‘mature’ companies like SpaceX—24 years old and generating tens of billions in annual revenue—the historical record is even less favorable.

Truist’s Sam Grelck also notes short-term performance usually outpaces long-term: the first week to three months post-IPO often do well, but declines and negative returns emerge as the time frame extends to a year and beyond. "We don’t know how it’ll turn out; exceptions exist," he said, "maybe SpaceX will perform well with no major pullback."

Retail Surge and Passive Index Buying

A distinctive feature of this IPO is exceptionally high retail participation. About 30% of IPO shares are allocated to retail investors, far above the typical 5%–10%, while multiple online brokerages have significantly lowered access barriers for ordinary investors to subscribe at the issue price.

Yet larger retail participation may also mean greater price volatility risk. Grelck points out that retail investors are more likely than institutional ones to simply sell quickly when growth falls short of expectations, rather than waiting it out.

On the other hand, index inclusion mechanisms will underpin passive buying. Nasdaq 100 recently changed its rules to allow SpaceX inclusion within 15 trading days, meaning holders of popular ETFs like QQQ tracking the index will automatically become SpaceX shareholders; Russell indices will allow SpaceX quick inclusion within 5 trading days. "A lot of money tracks these indices," Grelck says, "so as SpaceX enters the index, systematic buying could provide some support for the stock price."

Lock-up Arrangement: Volatility’s Hidden Variable

Another notable detail is SpaceX’s unconventional share lock-up schedule. Unlike the usual practice requiring insiders and early shareholders to wait 180 days after listing to sell, SpaceX allows some investors (excluding Musk himself) to sell a portion of their holdings just weeks after IPO, with further unlockings in batches until December.

Owens believes this means persistent selling pressure over the next six months. Even if actual selling is limited, the market could preemptively sell at each unlock point, creating phased pullbacks.

Furthermore, the 556 million IPO shares account for only about 4% of total equity. As early investors cash out via partial unlocks, supply in the market will keep increasing, and even with passive index buying offering some offset, downward pressure on the stock price is not to be ignored. Owens concludes:

"We believe long-term investors wishing to share in SpaceX’s future will likely see safer entry points than the issue price after the initial offering."

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