Be Warned: A Historical Triple Whammy Awaits the SpaceX IPO
SpaceX is on track to go public in the latter half of June, potentially raising $75 billion and earning a valuation of $1.75 trillion to $2 trillion. However, the IPO faces a historical triple whammy, including large IPOs tending to flop, an egregious valuation, and the historical tendency of game-changing technologies to experience an early bubble-bursting event.
Wall Street is anticipating a significant event with SpaceX's impending initial public offering (IPO). The company filed a confidential IPO with regulators on April 1, and it could debut as early as June. SpaceX is expected to raise $75 billion and be valued at $1.75 trillion to $2 trillion, potentially breaking the record for the largest IPO. However, the IPO faces challenges, including the historical tendency of large IPOs to underperform, with only one out of six brand-name IPOs since 1999 being higher six months after its debut. SpaceX's valuation is also a concern, with a price-to-sales ratio likely in the high double digits or low triple digits, which is unsustainable according to historical trends. Furthermore, game-changing technologies like AI and space infrastructure have historically experienced early bubble-bursting events, which could impact SpaceX's performance.
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