Key insights
- SpaceX's IPO saw significant retail investor participation, with over 20% of shares allocated to non-professionals at $135. The stock debuted on Nasdaq at $150 and experienced high volatility throughout the day, peaking at $176.52 before closing at $160.95. While initial buyers saw gains, the subsequent price action suggests a mixed outcome for many day one investors, potentially indicating early signs of speculative trading and a challenging path for sustained upward momentum.
The whirlwind Day One of public trading of SpaceX (SPCX +19.22%) shares has come to a close. If you like edge-of-your-seat excitement with lots of twists and turns, it was about as thrilling a day as you could ask for.
If you like big share price gains, it was more of a mixed bag.
Here's how Day One investors fared on the first trading day of SpaceX stock.
SpaceX offered an unprecedented amount of IPO shares to retail investors. More than 20% of the IPO shares were ultimately allocated to non-professional investors through five brokerages, priced at $135/share. With over $100 billion in demand, however, many investors only received a fraction of the shares they requested.
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However, those who got ahold of them were already winners when the stock began public trading at 11:46 AM, debuting on the Nasdaq at $150/share. By 11:52 AM, about six minutes later, they had surpassed $160/share. At 11:55 AM, they briefly hit $168.75/share before dropping again. At 12:04 PM, they dropped to $155.42/share before heading back upward to peak for the day at $176.52/share at 1:10 PM.
The rest of the trading day, however, was a different story.
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The share price had a slow and bumpy descent for most of the afternoon, bottoming out at $157.46/share at 3:53 PM, before rallying slightly to close at $160.95/share. That gives the company a $2.1 trillion market cap, which should make CEO Elon Musk one very happy trillionaire.
Unfortunately for most investors, if you didn't manage to luck into some IPO shares, and you didn't buy during the first few minutes SpaceX shares were publicly trading, you probably lost money today. Because after 11:52 AM, the stock only spent about 17 minutes of the trading day below its ultimate closing price (12:03 PM to 12:05 PM, and 3:40 PM to 3:55 PM). And even then, it was less than $6/share below that closing price, so gains were minimal, though the stock did rise by a few percentage points in after-hours trading.
Even though the marquee number from SpaceX's first trading day shows the stock up 19.2%, it's important to remember that only IPO investors actually notched that much of a gain. Lightning-fast market investors who picked up shares at the opening price of $150/share would be up just 7.3% for the day, and those who waited just three minutes to buy shares at 11:49 AM are only up 1%. Most other investors are in the red.
Of course, we here at the Fool are long-term investors, so we know that SpaceX's day one performance won't matter much in the long run. However, it can serve as a cautionary tale that hot stocks making big upward moves on hype alone -- like meme stocks or highly anticipated IPOs -- can only move upward for so long. Buying into such a stock too late is worse than not buying in at all.
And sometimes "too late" only takes three minutes to arrive.