Individual investors who participated in the highly anticipated initial public offering of SpaceX are facing a difficult decision: whether to hold onto their shares or sell them, as many received far fewer shares than they had applied for.
Across various online investing forums, numerous users have reported that despite applying for a large number of shares, they were ultimately allotted just a single share. Among those who did receive shares, strategies have diverged sharply: some opted to sell immediately on the first trading day to lock in gains, while others are choosing to hold for the long term.
One investor, 51-year-old Marvin Rong, applied for 1,000 shares through the Robinhood platform but was only allotted 17. He sold all of them shortly after trading began.
"I've sold all my SpaceX holdings at $160," Rong stated. "The stock has been volatile and hasn't found stable footing. I'll keep watching and look for an opportunity to re-enter after the six-month lock-up period expires."
Following its landmark Nasdaq debut, SpaceX shares surged another 20% on Monday, continuing their upward trajectory. The stock closed its first day of trading last Friday at approximately $161, a 19% increase from its $135 IPO price, propelling the company's total market value past $2 trillion.
Ross Cameron, the 41-year-old founder of the Warrior Trading educational platform, also did not receive his full requested allocation. He initially applied for 2,500 shares through Charles Schwab and later increased his request to 4,250 shares before the deadline, but was ultimately allotted only 147 shares at the $135 offering price.
"I had hoped for a full allocation for a larger total gain, but I understand the demand for this IPO was exceptionally high," Cameron said. "My strategy is to set a stop-loss if the price falls below $150 and to take profits if it approaches $200."
Cameron remains cautious about the future, predicting that the market will face significant selling pressure once lock-up restrictions expire and a large volume of restricted shares become available for trading.
"Over the next six months, the expiration of lock-up periods will undoubtedly trigger a major wave of selling. It will be challenging for incoming buy orders to support the stock at its current elevated levels," he added.
An Unprecedented Level of Demand
Brokerage platforms experienced an unprecedented surge in applications. SoFi noted that the SpaceX IPO was the largest and most oversubscribed new listing in the company's history, while Charles Schwab described client enthusiasm as "unprecedented." SoFi, Fidelity, Robinhood, E*TRADE, and Charles Schwab all allocated shares to eligible investors. However, because market demand vastly exceeded the total number of shares available, the vast majority of investors received only a small fraction of their requested orders.
Some investors are taking a long-term view. Helena Markum, co-founder of Markum Trading Company, received the full two shares she applied for and plans to hold them.
Markum has chosen not to buy more shares at this time, believing SpaceX's current valuation is "on the high side." She expects significant price volatility as locked-up shares are released and plans to wait for the market to fully price the stock before considering adding to her position.
This polarization in investor sentiment reflects a deep divide in the market's assessment of the high-profile company's valuation. Some investors are bullish on the long-term growth potential of the Starlink and commercial space sectors, viewing SpaceX as a rare long-term investment opportunity. Others, wary of its massive $2 trillion market capitalization, are choosing to take profits early.
Symbolic Allotments Spark Discussion
Justin Sacco, founder of Sacco Financial, applied for 75 shares through Charles Schwab but received only 11. Instead of selling, he purchased an additional 4 shares in the secondary market after the IPO, bringing his total holding to 15 shares.
"It's a bit disappointing to apply for 75 shares and only get 11, but given the unprecedented demand for this IPO, this outcome was expected. Getting any allocation beyond the initial request is a decent result," Sacco said.
Despite concerns about the company's high valuation, Sacco still plans to hold his shares for the long term.
Compared to many retail investors, Sacco's allotment was relatively fortunate. On the popular Reddit investing forum "WallStreetBets," numerous users have posted screenshots showing they applied for hundreds or even thousands of shares but were allotted just one. Many have joked that the tiny allotment serves as little more than a souvenir from one of the most anticipated IPOs in recent years.
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