SpaceX begins trading tomorrow, June 12th. The buzz is unlike anything we’ve seen in years. It will be the largest IPO in stock market history.

Our goal is to give you some context before the excitement gets louder.

SpaceX is a great company. What has been built in commercial spaceflight and satellite communications is genuinely historic. But great companies and great investments are not the same thing. Price matters — and the price being asked right now deserves a serious look.

The Valuation Is Unlike Anything We Have Seen

SpaceX is being valued at approximately 92 times its annual revenue — and the company is not currently profitable. Think of it this way: if SpaceX were a house, you’d be paying $920,000 for a home that generates $10,000 a year in rent. The bet is entirely on what it might become — not what it earns today.

For additional perspective: at the height of the dot-com bubble, the average technology company in the S&P 500 traded at roughly seven times revenue. SpaceX is priced at more than thirteen times that level.

IPOs Have a Track Record — and It Isn’t Pretty

Here is something most investors don’t know: IPOs, as a group, have consistently underperformed the broader market for decades.

Dimensional Fund Advisors studied U.S. IPOs from 1992 to 2024 and found that IPOs underperformed the U.S. stock market by more than 5% per year on average. That gap held across every decade studied — including the dot-com era, when IPO enthusiasm was at its peak.

There is also a structural problem with IPOs that rarely gets discussed. The institutions and insiders who receive shares at the offering price are like concert promoters who got tickets at face value. By the time the general public can buy, they’re paying scalper prices — and the long-term returns often reflect that.

How We Think About This

We are not here to talk you out of being excited about SpaceX. It may be one of the most important companies of our lifetime. But our job is to help you make sound decisions — and sound decisions require being honest about risk.

Chasing a story at its loudest moment has rarely been a reliable path to strong returns. The investors who get hurt most by IPOs are the ones who feel like they can’t miss it.

What we know: IPOs have a well-documented history of underperformance. Paying 92 times revenue for an unprofitable company carries real risk what we don’t know: whether SpaceX will be the rare exception. But history suggests the odds favor patience over urgency.

We don’t believe in chasing the opening bell. If SpaceX is as transformational as its believers expect, your diversified portfolio will own it – just at a price set by the market, not by the hype.