Why I’m Sitting Out the SpaceX IPO

Important disclosure: I am a licensed wealth advisor. This post is for informational and educational purposes only and does not constitute personalized financial advice for any individual. Nothing written here should be construed as a recommendation, a promise, or a guarantee of any specific investment outcome. Every person’s financial situation is different, and you should consult with a qualified financial professional before making any investment decisions.

Let’s be real. SpaceX going public is one of the most exciting financial stories in years. The company controls over 80% of US rocket launches, Starlink has crossed 10 million active customers across 160 countries, and tomorrow it becomes the largest IPO in history, targeting a $75 billion raise at a $1.75 trillion valuation. The hype is very, very real.

I’m going to skip it entirely.

Not because I think SpaceX is a bad company. It’s a genuinely remarkable one. But there’s a difference between a great company and a great investment, especially at this price, and especially right now.

The Numbers Don’t Lie (But the Hype Might)

Here’s what’s making me pause. SpaceX’s valuation trajectory has been nothing short of vertical. In early 2024 it was valued at around $210 billion. By the end of 2025, it had ballooned to $800 billion. The jump to $1.75 trillion would happen in the span of months, not years. That’s not a business growing into its valuation. That’s a story getting more expensive to believe.

At a $1.75 trillion valuation, that implies a price-to-revenue multiple of roughly 90 to 100 times. The company also booked a $4.9 billion net loss in 2025, reversing roughly $791 million in profit from the prior year.

I’m not the only one raising an eyebrow. Morningstar, one of the most respected names in independent investment research, has been pretty blunt about this. They value SpaceX at $63 per share, a 53% discount to the IPO offering price of $135. Their conclusion? “We think the company has been significantly overvalued and investors will have opportunities to buy the stock at more attractive levels after the IPO.”

Let’s sit with that for a moment. Morningstar isn’t saying SpaceX is worthless. They’re saying right now, at this price, you’re paying too much and that the market will likely give you a better entry point later.

IPO Hype Is a Pattern, Not an Event

SpaceX isn’t the first company to generate this kind of fever. The historical record on high-hype IPOs is worth knowing before you wire money in.

According to research by Jay Ritter, IPOs from 2012 to 2021 averaged a 23.6% first-day gain, but the average three-year return was just 10.6%. That gap between Day 1 excitement and long-term reality is the thing most retail investors never stick around to see.

It goes further than that. A study published in the Journal of Finance found that IPOs underperformed comparable firms by approximately 23% over a three-year period following the offering. And a broader analysis of 7,487 US IPOs between 1975 and 2014 found statistically significant and economically meaningful underperformance for up to two years after going public, even after accounting for standard risk factors.

The pattern is pretty clear: the loudest IPOs often make the worst medium-term investments.

I Don’t Time Markets. That’s the Whole Point.

Here’s the thing about my investing approach: I don’t try to beat the market or catch waves. I’ve made peace with the fact that I’m not going to consistently out-think institutional investors with decades of experience, proprietary data, and teams of analysts. Almost nobody does, long-term.

What I can do is stay consistent, keep costs low, and let time do the heavy lifting. That means boring, diversified, long-term strategies that match my actual financial goals, not whatever’s generating headlines this week.

The SpaceX IPO is a genuinely exciting story. But exciting stories often come with inflated price tags. And if Morningstar is right that the upcoming IPO does not offer the best entry point for retail investors, I’m happy to wait, watch, and potentially revisit once the froth settles.

My goal isn’t to make a quick buck on Day 1 momentum. My goal is to still be doing well in 20 years. Those are very different games, and I know which one I’m playing.

Again, nothing in this post is personalized financial advice, and I make no promises or guarantees about any investment outcome. If you’re seriously considering the SpaceX IPO, read Morningstar’s full analysis, dig into the S-1 filings, and speak with a financial professional who knows your specific situation before making any decisions. This is simply my perspective on why it doesn’t fit my own strategy.