SpaceX Will Do 2 Things Never Before Seen in the IPO Market (Hint: 1 is a Big Deal for Retail Investors)

Despite volatile market conditions, SpaceX appears to be moving forward with its initial public offering at breakneck speed. The prediction markets have placed the odds of the company completing an IPO before July at over 50% (as of March 30).

SpaceX is a first in many regards. For one, the company is a leader in the space sector. Not only does SpaceX use reusable rockets for astronaut launches, but the company has also built a low-orbit satellite network called Starlink that provides high-speed internet access globally, even in hard-to-reach areas where traditional fiber or other cable equipment is unavailable or too expensive to build.

Not only is SpaceX a one-of-a-kind company, but its debut on the public market will do two things that are rarely seen before in an IPO. One could be a big deal for retail investors.

Image source: Getty Images.

1. SpaceX will likely be the largest IPO ever

The SpaceX IPO would be the largest ever, at least so far. Media outlets from CNBC to Barron's to PitchBook have estimated that the company could raise anywhere from $50 billion to over $75 billion, valuing it at as high as $1.8 trillion. That would immediately place the company in an elite group with fewer than a dozen publicly traded companies that have market caps over $1 trillion.

Until now, the largest ever IPO had occurred in 2019 with Saudi Arabia's state oil company, Aramco, which raised over $29 billion and went public at a valuation between $1.5 trillion and $1.7 trillion. However, SpaceX could be the start of a string of several massive IPOs either this year or next, with artificial intelligence (AI) giants like Anthropic and OpenAI also reportedly considering future IPOs that are expected to be in a similar range.

The SpaceX IPO is vastly different from a sovereign oil company and is venturing into a whole new sector, literally off the planet. Additionally, Aramco is one of the most profitable companies in the world. The company made over $106 billion in 2024 and over $121 billion in 2023. Meanwhile, SpaceX reportedly only made $8 billion of net income on as much as $16 billion of revenue in 2025.

So investors would really be buying SpaceX at an incredibly high growth valuation. What's also interesting is that SpaceX now owns xAI, which includes Grok and the social platform X (formerly Twitter). The deal, completed earlier this year, valued the combined entity at $1.25 trillion.

2. There will be a disproportionate allotment to retail investors

Retail investors will be excited to learn that Reuters, citing anonymous sources, has reported that SpaceX founder Elon Musk is contemplating allocating 30% of the IPO to retail investors. That's triple the amount most IPOs allot to retail.

The strategy doesn't come as a complete shock. Musk has a cult-like following, and his other company, Tesla, is one of the most owned stocks on the popular retail brokerage Robinhood Markets.

The IPO is so big that SpaceX is reportedly tapping at least half a dozen investment banks to help with distribution. Morgan Stanley's E*TRADE will reportedly handle smaller retail investors; Bank of America will handle U.S. high-net-worth individuals and family offices; and Citigroup will handle international retail investors.

I would expect demand for the IPO to be high across the board, given Musk's following and SpaceX's well-known status. The hype will likely be off the charts.

Valuation is likely not as important for this company because it's one of those bets on uncharted territory, where investors are betting that SpaceX will venture into a whole new market and immediately snap up significant market share, similar to what Tesla initially did with electric vehicles.

Investors should keep this in mind if they have an opportunity to purchase the stock. While getting in on day one often feels great, patient investors will likely have the opportunity to purchase the stock at lower prices after the IPO, once lock-up provisions expire and insiders can begin to unload their shares.

Citigroup is an advertising partner of Motley Fool Money. Bank of America is an advertising partner of Motley Fool Money. Bram Berkowitz has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Tesla. The Motley Fool has a disclosure policy.