Larry’s Note: The stock market is rigged so that wealthy insiders get access to private companies like SpaceX before they go public… setting up a huge payday for a select few.
That’s why I’m continually searching for opportunities where the “little guy” actually has an advantage. And in recent months, I’ve uncovered a new market that is accessible to almost anyone – and hasn’t been gated by Wall Street’s elite yet.
I’ll be sharing all about what I call “the last unrigged market in America” next week on June 17 at 8 p.m. ET. The most exciting part? I believe we have a real edge to take advantage of inefficiencies in this new market. That means serious gains in the double- and triple-digits are more than possible.
If you want to learn more – and have the chance to get my next trade recommendation for free – then RSVP to attend with one click right here.
The most anticipated market debut in history is just a day away.
Elon Musk’s SpaceX is going public in a record-setting initial public offering (IPO), allowing investment from the general public for the first time.
With a valuation of $1.75 trillion, it will be the most valuable IPO in history.
The company also plans to raise $75 billion in doing so – nearly three times the prior record.
Reports suggest that investors are clamoring to get their hands on shares, with the IPO drawing more than $250 billion of demand… nearly four times the planned offering size.
But if you’re among the many itching to grab shares, you’d better think twice.
Here’s why you should avoid SpaceX shares immediately following the IPO and do this instead…
With SpaceX looking to go public at a valuation of $1.75 trillion or more, the easy money has already been made. Investors privileged enough to invest during the company’s private fundraising rounds are sitting on a windfall.
SpaceX was worth $12 billion in 2015. By 2021, that figure jumped to $100 billion. And in 2024, SpaceX was valued at $350 billion (chart below).
Source: Chart from BitMEX
Since then, the valuation has grown another fivefold – to $1.75 trillion today.
Stocks that are priced high can certainly trade higher. But relative to the fundamentals, SpaceX’s valuation is looking rich.
Compared to the company’s 2025 revenues, SpaceX is looking to go public at a price-to-sales (P/S) ratio of nearly 100. Just to put that figure in perspective, Nvidia (NVDA) currently trades at a P/S ratio of about 20.
Elon’s other public venture, Tesla (TSLA), has never traded richer than a P/S ratio of 35.
Buying stocks at elevated valuations tends to be associated with poor forward returns, especially looking out over longer periods.
But if you feel you must own SpaceX, there’s a better way to get into the stock than buying on day one. Consider this strategy instead…
For all the excitement that blockbuster IPOs create, many newly public companies suffer a hangover.
One study looked at 30 recent major IPOs including companies like Meta Platforms (META), Robinhood Markets (HOOD), and Palantir (PLTR). The performance of those IPOs a year later was a mixed bag, with only 43% delivering a positive return.
But the maximum drawdown during the first year of being public really stands out. Each IPO saw an average maximum drawdown of 55% during the first year of trading.
So even if you are eager to own SpaceX shares, you may want to wait for a pullback in the stock… just like we’ve seen with these other blockbuster IPOs. Alternatively, you could plan to buy shares in tranches, where you allocate a little bit at a time on pullbacks.
Another way to profit from SpaceX is with a more active approach.
SpaceX is set to shake up passive funds – some of which are changing their rules in order to add SpaceX to their holdings faster than they’d usually be allowed.
That means SpaceX could throw the indexes into turmoil once it goes public. My team has shared more about the forced selling that could even strike the Mag 7 as a result on the Trading With Larry Live podcast.
With all this in mind, my advice is to wait out the immediate aftermath of the SpaceX IPO. The last thing you want is to buy in at the peak only to suffer painful losses.
Part of trading (and investing) successfully is looking for opportunities few else see… not piling in with the masses.
Happy Trading,
Larry Benedict
Editor, Trading With Larry Benedict
Reading Trading With Larry Benedict will allow you to take a look into the mind of one of the market’s greatest traders. You’ll be able to recognize and take advantage of trends in the market in no time.
