One Month Out From its IPO, Advisors Urge Discipline on SpaceX

One Month Out From its IPO, Advisors Urge Discipline on SpaceX Financial advisors say most public companies underperform for at least a year post-IPO, and investors should ask themselves whether conviction or FOMO is driving their interest. Over a month after SpaceX debuted in the public markets, financial advisors continue to see little reason for investors to rush into the stock, noting that clients have to be honest with themselves about why they want exposure to the company. So far, SpaceX has followed a common blueprint for a highly anticipated IPO, with an initial rush of excitement, followed by a more rational reassessment based on earnings and fundamentals, said David Busch, chief investment officer of Scottsdale, Ariz.-based Trajan Wealth LLC. After debuting at $135 per share and reaching a high of $226, the stock has since fallen precipitously and is now trading below its IPO price. (It sat at around $127 per share as of midday Tuesday.) Advisors also finally had a look at the company’s financials in its S-1 filing, which revealed that in the first quarter of 2026, Space recorded a net loss of over $4 billion, driven primarily by its xAI segment. “The one profitable segment is Starlink, and that’s kind of the silver lining within the SpaceX IPO,” noted Busch. “So, I would say the valuation really still assumes near flawless execution across a very capital-intensive business.” Busch still believes SpaceX has a compelling story, so he plans to listen to its next earnings call. But this is the time for discipline, he noted—especially since the window for early SpaceX investors to cash in on their shares is still looming. Similarly, in a commentary released on July 16, Janus Henderson analysts Taylor Portman and David Chung warned that while SpaceX’s plan to capitalize on future trends such as “orbital data centers” might be more realistic than some people give it credit for, “investors should treat it as optionality rather than a base case, with the timeline and scale still very much open questions.” Communications, defense and infrastructure are all sectors that look set to benefit from strong secular trends in the years ahead, Portman and Chung wrote—but when it comes to specific companies, investors still need to look for rational valuations and proof that the company can execute on its growth prospects. What investors should also keep in mind is that most public companies tend to underperform the market for at least a year following their IPO, and sometimes much longer, said Gina Martin Adams, chief market strategist at Atlanta-based RIA HB Wealth. If they believe in the growth prospects of the space exploration industry as a whole, they might be better off investing in an ETF that focuses on innovation, including space-focused companies such as SpaceX, to benefit from more diversified exposure. But if they are eager to invest in SpaceX stock directly as soon as possible, they need to ask themselves whether that desire is guided by conviction or FOMO. “One really classic question to ask yourself is this: if I get into SpaceX today and we go through a 20% correction, am I still going to be a happy owner of SpaceX?” Martin Adams said. “If the answer is ‘yes,’ then you probably have a pretty high conviction that you need to own this company.” Matthew Parenti, managing director at Chicago-based Hightower Signature Wealth, had a similar take. If clients are ready for a long-term hold and already have a diversified portfolio, he feels the moment might be right for them to invest—as long as they realize they are not likely to experience the same kind of explosive growth that previous Elon Musk-led companies had because they entered the public markets much earlier in their lifecycles. Investors in ETFs that track the Nasdaq 100 already have exposure to SpaceX, since the index’s new methodology helped fast-track the company into it. However, since indexes are float-adjusted, “investors should remember that [SpaceX’s] public float would likely represent only a small fraction of the company’s total value,” wrote Sam Huszczo, CIO at Lathrup Village, Mich.-based RIA SGH Wealth Management, in an email. In addition, at least six closed-end funds—including an interval fund and two tender offer funds—have SpaceX allocations ranging from 0.74% to 16.41%, according to XA Investments. However, Parenti said for clients seeking exposure through a fund, he would recommend an ETF for easier access to liquidity. Overall, more than 150 ETFs now hold SpaceX, according to Morningstar. What investors should avoid at this point is committing to a fund that holds SpaceX as its primary holding, for the same reasons they should postpone buying SpaceX stock until they have a data-based understanding of the company’s future prospects, said Busch. Both Martin Adams and Huszczo suspect that many investors today are driven by FOMO. Since many of the big names announcing plans to go public in the coming months have stayed private far longer than is historically the norm, retail investors have a better understanding of what they do and their potential impact on the economy, said Martin Adams. “There is a lot of pent-up demand for ownership, but it’s difficult to distinguish that from a fear of missing out in this environment. I think it’s a little bit of both.” Huszczo pointed to how quickly leveraged products and options activity appeared around SpaceX stock a few days after the IPO—over a million options in SpaceX traded on June 16, while at least 11 leveraged SpaceX ETFs launched by the same date—as a sign that FOMO might be driving investor behavior. “Whenever investors become more excited about the wrapper than the underlying investment, it’s worth slowing down,” he wrote.