From private giants to public markets: what the SpaceX IPO tells investors

This article was first published in our Direct Investor Magazine on 3 August

Space Exploration Technologies’ initial public offering (IPO), better known as the SpaceX IPO, took place on 12 June 2026. It was no ordinary stock market listing. It raised $86bn at a colossal $1.77tn valuation and represents a clear indication of how share markets are evolving. 

Amid significant initial volatility, the valuation briefly surpassed the combined value of JPMorgan and Visa, and it sits ahead of companies such as Tesla, Meta, Berkshire Hathaway and Walmart. 

But the real lesson for investors isn’t just about scale – it’s what the IPO signifies about the changing structure of markets.

The age of the ‘already massive’ IPO

SpaceX highlights a trend that has been building for over a decade. Typically, the most successful companies are staying private much longer and listing only once they have already become very large. 

In earlier cycles, IPOs were primarily about raising capital at an early stage to fund growth. Today, many of the world’s most innovative businesses find they can raise ample capital through private markets, or even self fund their initial phases of expansion. 

This means that ordinary investors are only able to buy in much later in a company’s growth trajectory – once shares are made available on public markets and perhaps once the most explosive phases of development are behind them. By the time SpaceX listed, it was already running a multi-billion-dollar operation with a dominant market position. 

Making no particular judgement about the potential opportunity in SpaceX, there is also the uncomfortable reality that retail investors are essentially ‘exit liquidity’ for early-stage investors that have been onboard for many years. In this context, it is important to note that pre-IPO holders such as employees and early backers must wait several months to sell any shares, and releases are staggered so as to limit the supply of shares to the market. 

We are seeing the same pattern emerge in AI, with Anthropic and OpenAI recently filing IPO documents. Both carry valuations approaching or exceeding $1tn in private markets. As architects of the AI revolution, there is no denying that these are hugely important companies. But sadly, most investors are only going to be able to grab a slice after a period of rapid progress has already taken place.

Volatility is the price of complexity 

The second key takeaway from the SpaceX IPO is the level of volatility that comes with newly listed companies that are difficult to value. 

SpaceX doesn’t fit neatly into a single category. It encompasses existing, profit-generating satellites used for Starlink and a rocket launching business that is also compelling in the here and now with nascent, far more cash-hungry, speculative enterprises in AI (Grok and orbital compute) and even, eventually we are told, space colonisation. 

This mix makes traditional valuation approaches somewhat redundant and a fair price difficult to gauge. Beauty is very much in the eye of the beholder. Predictably, this has resulted in wild price swings as the market searches for an anchor point. 

In the immediate aftermarket, trading dynamics have also been shaped by technical factors. A relatively short lock-in period, with a 15-day "flipping" window for certain allocations, has the potential to increase selling pressure shortly after listing as early participants take profits. At the same time, the underwriters and bookrunners are able to provide price stabilisation for up to 30 days following the IPO. This is typically executed via a greenshoe option, which allows underwriters to stabilise a newly-listed stock by selling extra shares at IPO and then buying them back in the market if the price falls, supporting it around the issue price.

History shows that many IPOs underperform over a three-year period. Yet, outcomes vary widely, illustrating that it’s common for newly-listed shares to take time to find an equilibrium, and that the underlying business may either exceed, or fall well short, of the pre IPO promise. For SpaceX, volatility is amplified by its sheer size and ongoing investment requirements, reminding investors that growth comes at a cost. 

Coming to a tracker near you: a hidden consequence for passive investors 

One of the most overlooked consequences of the SpaceX IPO is its effect on market indices. When a company lists at this scale, it doesn’t just join indices – it reshapes them. The advent of mega IPOs, like SpaceX, has forced some index providers to rethink their methodologies to cater for earlier inclusion, including those referenced by the Nasdaq and FTSE indices. 

The US S&P 500, however, hasn’t changed its rules and continues to require companies to have been publicly listed for at least 12 months before they can be considered for inclusion – a so-called “seasoning”. 

When SpaceX joins the major indices, the impact will be significant. Unlike most newly listed companies, it will become one of the market’s largest constituents quickly. However, the weight may initially be lower than many investors expect. This is because index providers base allocations not only on the value of a company, but also on the shares available to public investors, and a substantial proportion of SpaceX ownership is currently held by founders, employees and private investors rather than being freely traded on public markets. 

This means exposure to SpaceX through index funds and ETFs is likely to build gradually as more shares become available to the market. 

The trillionaire moment 

A striking by-product of the IPO was the creation of the world’s first trillionaire, Elon Musk – a milestone that underscores the sheer magnitude of modern capital markets. 

To grasp the scale, below is the equivalent, using time as a measurement:

1 million seconds 

11 days, 13 hours, 46 minutes – roughly a summer holiday 

1 billion seconds 

31.7 years – roughly a generation 

1 trillion seconds 

31,700 years – back to the last Ice Age and Palaeolithic era

Looking ahead, the implications for upcoming IPOs in OpenAI and Anthropic are significant. They too will arrive big. Investors will similarly be asked to value already dominant businesses, not emerging ones, but with uncertain and hard-to-value growth trajectories ahead as they attempt to scale revenues. 

It means more of the same should be expected: significant volatility as the market digests, and attempts to value these stocks. A gradual build to being major index constituents as the ‘free float’ increases. And ultimately, a greater concentration of major indices – such as those followed by global tracker funds – in the AI and related technologies complex. 

The big takeaway is therefore that many popular indices are becoming increasingly influenced by fewer, larger firms, and this has important implications for those aiming to construct a well-balanced and resilient portfolio.