SpaceX wants regular investors to help its stock launch. Here's what to know before clicking 'buy'
When SpaceX makes its debut on the U.S. stock market, it wants smaller-pocketed, mom-and-pop investors to play a big role in what may be the
When SpaceX makes its debut on the U.S. stock market, it wants smaller-pocketed, mom-and-pop investors to play a big role in what may be the biggest IPO ever.Elon Musk's rocket company, formally known as Space Exploration Technologies Corp., is steering some of its initial public offering of stock directly to what are called "retail" investors. These are people who buy stocks in a brokerage account on their phone, not pension funds or other big "institutional" investors routing orders to their professional trading desks.Here are some things to keep in mind as the IPO approaches:A chunk of SpaceX stock will go to regular investorsMost IPOs offer only 5% to 10% of the total offering to retail investors, according to Fidelity. In this case, though, it could be up to 30%. SpaceX expects retail investors to participate in its IPO through Charles Schwab, Fidelity, Robinhood, SoFi and E-Trade by Morgan Stanley.At Fidelity, investors with as little as $2,000 in their accounts could potentially snag SpaceX shares in the IPO. That's down from account minimums of $100,000 or even $500,000 that Fidelity has for other equity offerings.Demand from investors may be so high in this IPO that not everyone indicating interest will actually get a share.Trying for a short-term flip has risksGiven all the hype around SpaceX, temptation could be high to grab shares in the IPO and sell them quickly if a frenzy sends its price spiking. But brokerages have policies to block investors from future offerings if they dump shares bought in an IPO quickly, like within a couple weeks.Big swings in price may be possiblePotentially high interest from retail investors following the IPO is one reason SpaceX is warning that its stock price could be volatile.
These investors aren't known for moving as meticulously as a pension fund, which is trying to build money for payments it must make years or decades in the future.It's retail investors, after all, who helped drive GameStop and other "meme stocks" to market-bending heights in 2021 that professional investors called irrational.IPOs can see a big first-day bounce, but that may not lastThe typical IPO has seen a 7% jump in its first day of trading, from 1980 through 2025, according to Jay Ritter, an IPO expert and a professor at the University of Florida's Warrington College of Business.But IPOs tend to lag similar-sized peers in the ensuing five years, not including their first day of trading. They do so by an average of 3.6% per year, according to Ritter.SpaceX has debt and has been losing moneyIt's very expensive to launch things out of the earth's atmosphere and to construct huge AI data centers, and SpaceX has built up $29.1 billion in debt, as of the end of March.The company also lost $4.9 billion last year and another $4.3 billion through the first three months of 2026. It acknowledges that it "may not achieve profitability in the future."Over the long term, a stock's price tends to track with how much profit the company is making.You don't have to buy SpaceX to own itYou could end up owning some of SpaceX even if you never intended to. Consider the many people who own shares of the popular QQQ exchange-traded fund, which tracks the Nasdaq 100 index and has roughly $460 billion in total assets.Historically, the Nasdaq 100 index would wait until each December to add new members in an annual reconstitution to make sure it includes the 100 largest non-financial companies on the Nasdaq.
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