Today is the big day! The day SpaceX (SPCX) will start trading after its $75 billion Initial Public Offering. But no matter how intense the action gets for short-term traders here, long-term investors ultimately care about returns over time. So…should you buy?
That’s where the MoneyShow Chart of the Day comes into play. Based on data compiled by long-time IPO expert Jay Ritter at the University of Florida, it makes one thing clear. Unprofitable companies can have stellar debuts…but it’s the ones that make money which typically deliver better returns over time.
After Today, Where Will SpaceX Go?
Source: Yahoo Finance
Specifically, money losers rise 26.5% on average on IPO day. That compares to 13.3% for money makers. But over a three-year horizon, money losers historically generate a 0.5% loss for investors. Money makers deliver average gains of 33.6%.
Where does SpaceX fit in? It IS losing money. That includes $4.3 billion in red ink during the first quarter of this year – and $4.9 billion for calendar 2025. Heavy capital expenditure bills are weighing on its results, even as Q1 revenue climbed 15.4% year-over-year.
But that didn’t stop retail investors from reportedly asking for more than $100 billion in stock – or prevent institutions from vying for multi-billion-dollar slugs of shares. If all goes as expected, SpaceX will debut with a market capitalization of $1.8 trillion. The deal’s 23 banks will pocket hundreds of millions of dollars in fees. And the world may have its first trillionaire in CEO Elon Musk.
All I can say is…buckle up! It’s going to be a big day for SpaceX traders. Whether it’s a big couple of years for SpaceX investors remains to be seen.
