The SpaceX IPO has ignited a retail buying frenzy, with investors citing the Elon Musk factor, FOMO, and an unusually high retail allocation as key drivers, despite widespread criticism of the company's "ridiculous" valuation. Most retail investors indicate they do not intend to hold the stock long-term, instead betting on first-day price action for quick gains. Robinhood saw record trading volume, while Fidelity lowered its participation threshold. SpaceX shares surged over 30% intraday before closing up 19% at $161.
SpaceX officially began trading on Friday, with its stock soaring more than 25% on its debut. The fervent demand from retail investors starkly contrasted with their common skepticism over the company's valuation. The combination of the Musk aura, fear of missing out, and a rare, high proportion of shares allocated to retail investors shaped this market event, dubbed the "IPO Super Bowl."
The proportion of the IPO shares allocated to the public was just over 20%, lower than the previously anticipated 30% but still significantly higher than the typical 5% to 10% range seen in standard offerings.
To compete for these shares, retail investors flooded brokerage platforms like Robinhood, Fidelity, and Charles Schwab with applications. Fidelity lowered its account balance requirement for participating in this IPO to $2,000, down from its usual threshold of $100,000 to $500,000. Robinhood's trading volume hit a record high for the day.
Interviews with several retail investors revealed that the vast majority do not plan to hold the stock long-term. Instead, they are betting on a first-day rally providing a window for quick profits. The core logic driving their participation is faith in Elon Musk's ability to execute.
Fundamental signals supporting the high valuation also drew attention. SpaceX recently secured major computing power procurement agreements with Anthropic and Google, more than doubling its revenue forecast for 2026. Meanwhile, a minority of investors are looking further ahead, positioning this investment as a ticket to bet on the long-term narrative of the space economy.
SpaceX set its IPO price at $135 per share, implying a valuation of $1.77 trillion. The stock opened at $150, surged over 25% intraday to around $170, and peaked at $176.52. It ultimately closed up 19% at $161.
'Ridiculous' Valuation Fails to Deter Demand
Marvin Jung exemplifies many retail investors. The 51-year-old operations manager in the veterinary industry bluntly stated that SpaceX went public at a "very, very aggressive" valuation, calling it "frankly, ridiculous, stupid, and irrational." Yet, he still submitted an application for 1,000 shares via Robinhood.
Active during the meme stock frenzy and a long-time follower of Reddit investment forums, Jung's entry was not based on fundamentals but on betting on sentiment resonance. He said, "SpaceX plus what Musk is doing is like a beautiful symphony of all the right meme triggers. I'm guessing it will be up at least 30% on the first day." He plans to sell shortly after the opening and keep the proceeds for the next wave of major IPOs, like Anthropic and OpenAI.
However, investors must note broker "anti-flipping" clauses. For example, Fidelity states that selling allocated shares within 15 calendar days of listing may affect an investor's future eligibility to participate in public offerings.
Retail enthusiasm was also evident on social media. Data from Breakout Point shows mentions of SpaceX on the Reddit forum WallStreetBets have exceeded 1,600 since Monday.
'Hard to Bet Against Musk': FOMO Drives Participation
Mikey Moran admitted he hasn't "fully thought through" the trade but chose to participate anyway. The 49-year-old founder of a hair and beauty supply company applied for 20 shares via Robinhood, was allocated 11, and views it as a short-term rather than long-term holding.
His motivation stems partly from a past lesson: in 2018, he bought Tesla stock, held it for a few weeks, sold for a profit, and subsequently missed out on over 1,700% gains. "It's hard to bet against Musk," he described Musk as "someone who actually gets things done." Previously, in July 2025, he bought 10,000 shares of Opendoor Technologies, and the stock rose about 79% over the next two days—an experience that reinforced his confidence in catching short-term moves.
Andrew Chen, a 21-year-old Cornell University student majoring in finance and computer science, has felt the pain firsthand. He had previously taken long positions in several aviation connectivity companies, betting they were immune from competition, only to be disrupted by SpaceX's Starlink satellite internet network. "I bet against Musk and was dead wrong," he said. This time, he applied for 5 shares via Robinhood, intending to hold long-term. "From a corporate finance and fundamental perspective, you can't model your way to a $1.7 trillion valuation. But that's the point—it's all about future execution."
Divergent Retail Strategies: Quick Flips vs. Long-Term Holds
Not all retail investors were eager to jump in. Ross Cameron, founder of the trading education platform Warrior Trading with over 2 million YouTube subscribers, applied for 2,500 shares via Charles Schwab but was cautious. "We're buying at the highest price in history. That's the definition of 'dumb money,'" Cameron said. His actual decision would depend on the final allocation size—a large allocation would suggest weak demand, leading him to pass, while a small allocation would indicate strong demand, making it worth considering.
Even if he participates, he prefers to wait for a pullback, for insiders to sell down, and for lock-up periods to expire before evaluating. "That's when there might be real actionable opportunities," he noted.
In contrast, 30-year-old Helaine Markham is looking much further ahead. She and her husband Blane Markham run the trading education platform Markham Trading. She applied for just two shares via Robinhood but plans to build a position gradually. She is focused on long-term potential in nascent space-related industries like mineral mining and space-based AI data centers. "I really want to hold for 10-plus years to fully realize the long-term growth opportunity. It could even become a generational investment to pass on to my kids," she said.
Space Economy Narrative Attracts Long-Term Capital
Maurits Pot, CEO of Tema ETFs, is skeptical of the retail logic focused on quick flips. He manages the world's largest space-themed ETF, the Tema Space Innovators ETF, launched in late March with assets under management of approximately $2.6 billion. It is currently the only space-themed ETF that will directly hold SpaceX, with the position expected to be about 7% of the fund's net asset value. The fund is up roughly 40% quarter-to-date. "If people are investing in the space economy, it seems silly to be in and out of the SpaceX IPO. The space economy is only going to grow. The SpaceX IPO is not the finish line," Pot said. He anticipates multiple space-related companies will be in the S&P 500 by 2030.
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