Will SpaceX, Aiming for the Biggest IPO Ever, Soar After June 12? History Offers an Answer That's Remarkably Clear.

One of the biggest stock market events ever is just days away. SpaceX's historic initial public offering, likely to be the largest ever, is expected to happen on June 12. The company set a price of $135 per share and aims to sell 555.6 million shares -- this represents $75 billion and puts the company on track for a valuation of $1.77 trillion.

The SpaceX operation has stirred up excitement in the investment community, due to the sheer size of the IPO, but also the prospects of the company. SpaceX operates in the areas of rocket launches, satellite-based internet service, and artificial intelligence (AI) -- and these markets each could generate tremendous growth.

Now, with all of this in mind, many investors are wondering: Will SpaceX stock soar? History offers an answer that's remarkably clear.

Image source: Getty Images.

The SpaceX story today

Before we look back in time, though, let's consider the SpaceX story today. Founded by Elon Musk in 2002, SpaceX has gained tremendous visibility thanks to its strength in rocket launches. In 2008, it became the first private company to successfully send a liquid fuel rocket into orbit.

Last year, the company completed more orbital launches than any other, with a total of 165, according to Bryce Tech data. And over time, SpaceX has completed about 650 launches. Importantly, 85% of missions have used at least one reusable booster, a point that allows for great cost savings over time. The Falcon 9, back in 2010, already reduced launch costs by 85% to $2,700 per kilogram, according to NASA. Moving forward, SpaceX expects its fully reusable rocket, Starship, to increase launch numbers and further reduce costs.

Meanwhile, SpaceX's AI arm has also attracted attention as investors aim to get in on companies involved in this high-growth market. So far, however, the great levels of investment needed here have pushed SpaceX to a net loss. The company reported a loss of $4.9 billion last year, though revenue soared to $18 billion.

SpaceX's moneymaker

Finally, Starlink, the satellite-based internet service provider, is SpaceX's moneymaker, at least for now and likely for the near future. That business delivered more than $7.1 billion in adjusted EBITDA last year.

Leader Elon Musk also has added a spark of excitement to the SpaceX story as he's set big goals, from operating data centers in space to colonizing Mars. This may intrigue some investors but push away others.

All of this tells us that SpaceX is an exciting tech and industrial giant delivering fantastic growth. But some investors may not be comfortable with its high spending, the current loss, and the risk that certain goals may not be attained.

Will SpaceX soar or fall flat?

So, considering this, will SpaceX's stock soar -- or fall flat? A look at history offers us a remarkably clear answer. Over time, the largest U.S. IPOs have delivered more losses than gains during their first year of trading. Among the top 10, eight posted declines in their first 12 months on the stock market.

Of course, SpaceX may follow recent predecessors such as AI chip company Cerebras Systems, which surged 68% on its first day of trading, or AI cloud specialist CoreWeave last year, which soared more than 300% in its first few months on the market.

But, over time, history has shown that IPO companies don't necessarily skyrocket in their first year on the market, and instead, later offer investors many opportunities to buy on the dip.

Does this mean you should wait to get in on SpaceX rather than participate in the IPO or buy shares during its first days of trading? The decision depends on your comfort with risk. SpaceX has stirred up a lot of excitement, but it's important to remember that the company must invest heavily to reach goals -- and certain goals are based on technology that isn't a sure thing. If you're a cautious investor, you might want to wait to see a few more quarters of earnings reports before jumping in.

If you're an aggressive investor, however, you might view SpaceX as an interesting addition to your portfolio. Though you may aim to get in on this tech giant as early as possible, the good news is you don't necessarily have to do so to benefit over time. As we can see here, history shows us that in the majority of cases, IPO companies have offered patient investors the opportunity to buy at a better price a bit farther down the road.

Adria Cimino has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Meta Platforms, Uber Technologies, and United Parcel Service. The Motley Fool recommends Alibaba Group and Coupang. The Motley Fool has a disclosure policy.