SpaceX (SPCX -0.04%) stock finally begins trading publicly on June 12.
At a valuation of roughly $1.77 trillion, the company will be larger than Elon Musk's Tesla and big enough to rank among the 10 most valuable companies in the world on day one.
The IPO offer price is $135 per share. So, $1,000 theoretically gets you about just shy of 7.5 shares (many brokerages today offer fractional shares).
But for most retail investors, that math is misleading. It's unlikely you will be able to snag shares at the official price.
The $135 price probably isn't your price
Most IPOs set a price range and let investor demand determine the final number, but SpaceX skipped that step and simply set a hard $135 -- and that price applies only to investors who receive an allocation before trading begins.
If you're reading this, that's probably not you. That's reserved for big institutions and Wall Street insiders.
Image source: Getty Images.
The rest of us have to compete on the open market, and given the appetite for SpaceX stock, it's likely that the price on day one will be significantly higher.
The biggest IPOs rarely opened at their list price
If that happens, it won't be the first time.
Here's how the five largest U.S. IPOs before SpaceX priced and where they actually opened for everyone else:
| Company | Year | Offer price | Opening price |
|---|---|---|---|
| Alibaba | 2014 | $68.00 | $92.70 |
| Meta | 2012 | $38.00 | $42.05 |
| Uber | 2019 | $45.00 | $42.00 |
| AT&T Wireless | 2000 | $29.50 | $39.98 |
| Rivian | 2021 | $78.00 | $106.75 |
Source: Yahoo Finance Historical Data.
Four of the five opened above their list price. Of course, Uber actually debuted below its $45 offer price, a reminder that first-day pops are never guaranteed.
So what does $1,000 actually get you?
Obviously, I can't tell you where the stock will actually list -- the market will decide that on June 12. I will say that it would surprise me if the opening price isn't closer to $150. If that's the case, your $1,000 would get you just shy of 6.7 shares.
What's more important, however, is what happens after that. And despite the hype, I don't think SpaceX stock will stay there for long. I see the stock popping on day one and continuing to do well for the first month or so, but long term, I think shares will come back to earth.
Even if the stock lists below the offer price, I still see SpaceX as being severely overvalued, and I would avoid the IPO and its aftermath altogether.
