Will the SpaceX IPO Pop Tomorrow? Here's Why That Is The Wrong Question Investors Should Ask.

Tomorrow, June 12, SpaceX will debut on the Nasdaq stock exchange with the ticker symbol SPCX. It will be the largest initial public offering (IPO) ever, aiming to raise $75 billion for the company.

All eyes will be on the stock when it hits the markets, and it could pop more than $5 trillion, according to analyst Jim Cramer, if underwriters release too few shares, causing demand to explode.

But that's a one-day event. The only people it's relevant to are those who don't have trading restrictions and got in at a much lower price. Those insiders stand to make a lot of money from the IPO.

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Retail investors hoping to make a quick fortune on the stock movements could be left holding the bag, since the stock is likely to be volatile, and you won't be able to time your trades perfectly.

If you plan to hold on to the stock and not try to benefit from a short-term pop, you really need to know how it will play out over the next few years. And the historical precedent doesn't paint a pretty picture.

How's the company doing?

SpaceX is an exciting company. CEO Elon Musk has a vision of populating Mars, and he's literally reaching for the stars. Its mission statement is "to build the systems and technologies necessary to make life multiplanetary, to understand the true nature of the universe, and to extend the light of consciousness to the stars."

The company is the world's largest rocket launcher, but it has three segments: rockets, satellite broadband, and artificial intelligence (AI). The largest segment is actually satellite broadband, the Starlink business, which made $11.4 billion in sales last year, a 49% increase. It's also profitable, with $4.4 billion in operating income.

Image source: Getty Images.

AI is its largest addressable market. Sales increased 22% last year to $3.2 billion and reported a $6.4 billion operating loss. It's also responsible for most of the company's capital expenditures, accounting for $7.7 billion of the $10.1 billion in the 2026 first quarter.

In total, SpaceX's performance, led by Starlink, has been strong, but not spectacular. Sales increased 29% in 2025, but it reported a massive $4.9 billion net loss.

Is the stock worth it at the current price?

If you're interested in the business after assessing its performance and opportunities, you still have to consider whether it's worth the price. And SpaceX is quite expensive; at IPO, it will trade at a price-to-sales ratio of 92. For reference, the average S&P 500 (SNPINDEX: ^GSPC) price-to-sales ratio is 3.6, and the historical average is 2.5.

When it lands on the markets tomorrow, it could already be even more expensive; if it does hit $5 trillion, for example, that would be 259 times trailing-12-month sales, a valuation that belongs to another galaxy.

Where could it go from here?

That kind of valuation is a setup for a correction from the get-go as it heads toward the mean, and that's a common IPO problem. A Nasdaq study found that three years post-IPO, about two-thirds of stocks underperform the market, and 64% of those underperform by 10% or more.

The same study found that IPO stocks that do outperform the market do so by a large percentage, which is what draws so many investors to the mystique and power of the IPO. While there's no way to know in advance which IPO stocks will be winners down the line, SpaceX's valuation suggests this stock is unlikely to be one of them.

Taking it a step further, even IPO stocks that perform well eventually go through periods of volatility. Investors who really believe in the company will find great entry points during the stock's drop periods. If you're set on buying SpaceX stock, you may want to consider delaying gratification and picking up shares when they're priced to buy, not priced for perfection.

Jennifer Saibil has no position in any of the stocks mentioned. The Motley Fool recommends Nasdaq. The Motley Fool has a disclosure policy.