Individual Investors Could Get a Rare Shot at Buying Into SpaceX From Day One

Love him or hate him, we all can admit that Elon Musk has a knack for generating excitement. His next attempt at it may come with SpaceX's upcoming initial public offering (IPO), planned for June of this year.

In what could be the largest IPO in history, SpaceX may finally enter the public markets, and there may be a surprise for retail investors along the way. Here's the skinny on SpaceX's reported plans, and whether you should participate in the IPO and buy shares.

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Upcoming IPO and retail participation

SpaceX wants to go public within the next few months and is getting its paperwork in order for regulators and bankers. Like any Musk endeavor, the process promises to be unique.

For one, he is planning to raise the largest amount of money from an IPO in history, ranging from $40 billion to $80 billion, depending on investor appetite. The company says it wants to bring investors to its headquarters and launch facilities to showcase its manufacturing capabilities and possibly witness some rocket launches. It is a pitch on future growth for the space economy, including an ambitious plan for space-based data centers for artificial intelligence (AI).

Retail investors may get a bigger-than-normal chance to buy into the SpaceX IPO. Instead of the usual 10% allocation to retail investors, SpaceX wants to allocate upwards of 30% of the IPO shares on offer to retail investors, potentially raising tens of billions of dollars from individuals, along with the likely institutional investments. This will give many out there who use basic brokerage services like Robinhood Markets a chance to buy in at the pre-determined IPO price, the same as Wall Street insiders.

Lastly, Musk also wants SpaceX stock included immediately in stock market indices such as the Nasdaq-100, which investors can buy through exchange-traded funds (ETFs) like the Invesco QQQ Trust.

Why you should wait to buy SpaceX stock

Despite the hype around SpaceX -- and there is plenty of it -- investors should tap the brakes on buying SpaceX at the IPO. Just because you have the opportunity to buy something does not necessarily mean you should.

SpaceX is targeting a valuation of $1.75 trillion at the IPO. It reportedly did $16 billion in revenue last year. Solid growth and combining its recent merger of xAI and X (formerly Twitter), the business will likely do $20 billion or more in sales in 2026.

That would give the stock a price-to-sales ratio (P/S) of close to 100 at the IPO. There is a reason most IPOs underperform the broader market: Companies want to maximize their valuations on their market debuts. SpaceX is no different. If you like the company, keep the stock on the watchlist for now; better buying opportunities may arise in the next few years after the IPO hype settles.

Brett Schafer has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.