Al Root
The SpaceX record-setting IPO is in the books. The stock posted a 19% first-day gain. Now, investors are wondering what comes next.
History can help. But history also shows that investors can't rely solely on it.
SpaceX is the latest, and largest, in a long line of hot technology IPOs. Elon Musk's rocket company has leveraged lower costs to reach orbit by pioneering reusable rockets into a profitable space-based broadband network. Next up is orbital AI data centers. Expectations that space-based AI will be low cost and profitable underpin SpaceX's $2.1 trillion valuation.
Before SpaceX came Google, which is now Alphabet. Its 2004 IPO was a little unique, like SpaceX, which opted for a fixed $135 IPO price instead of a traditional range. Google conducted a modified Dutch auction (in which participants indicate the maximum price they are willing to pay), settling on an unsplit adjusted price of $85 a share.
Shares of Google were up about 8% the week after the IPO, following an 18% one-day pop. The stock was up about 176% a year after the IPO day-one close, according to FactSet.
Google shares really never struggled. The biggest post-IPO day-one drawdown was about one split-adjusted cent from the day-one close.
Maybe that points to smooth sailing for SpaceX. Facebook, now Meta Platforms, however, was a different story. Shares posted a tiny day-one gain and were down 17% the week after its 2012 IPO. The largest drawdown over the next year was 54%, and the stock was about 31% lower than on the first day of trading.
There are some differences between SpaceX, Google, and Facebook. The most obvious difference is size. SpaceX was a privately held company for about 24 years and is now the sixth-most-valuable company in the U.S. Facebook and Google were younger and less valuable.
SpaceX is also going into the Nasdaq-100 in a few days, which will generate billions of dollars in passive buying by funds indexed to the tech-heavy index. That should provide some support to shares.
Nasdaq will adjust the position size by float, or the shares available for trading. Essentially, it's as if a $225 billion company is going into the index, not a $2.1 trillion company. That will create $7 billion to $10 billion of passive buying.
In the end, history and the nuances of SpaceX show that there is no reason to expect a big drawdown after a successful day-one result.
"With IPOs we need to give them a few weeks of price history before [technical] indicators are helpful," said Fairlead Strategies founder and technical analyst Katie Stockton.
Technical analysts use stock charts and market history to help determine the direction of stocks over the short and medium-term. There isn't much history with SpaceX yet. "So we'll be wondering just like everyone else, " added Stockton. "It should be interesting."
SpaceX shares were up on Monday in premarket trading, rising 5.5% to $169.77, while S&P 500 and Dow Jones Industrial Average futures were up 1.2% and 0.8%, respectively.
Write to Al Root at allen.root@dowjones.com
This content was created by Barron's, which is operated by Dow Jones & Co. Barron's is published independently from Dow Jones Newswires and The Wall Street Journal.
(END) Dow Jones Newswires
June 15, 2026 07:09 ET (11:09 GMT)
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