Key insights
- SpaceX's upcoming IPO, with Elon Musk dictating terms at $135, presents a potential market risk. The article highlights the unusual speed of leveraged ETF launches for SpaceX and warns of their short-term nature. Historically, major IPOs like Bitcoin and Coinbase have preceded market tops, suggesting a potential bearish signal for broader equity markets if SpaceX's debut leads to a similar pattern.
Yahoo Finance Markets and Data Editor Jared Blikre explains what investors should expect from SpaceX's (SPAX.PVT) planned initial public offering (IPO) on Friday, outlines the leveraged exchange-traded funds (ETFs) coming out for SpaceX, and examines historical post-IPO market trends.
Elon Musk has said $135, take it or leave it. That's pretty unusual, but uh it's Elon Musk. He gets to dictate terms sometimes. But if investors don't want to pay up that much, you're going to see a little bit of fallout maybe and when the when we have the uh actual first trade tomorrow.
And on that note, it's probably not going to be until the afternoon. I'd be really surprised if we see a SpaceX first print before 1:00 p.m. Eastern, and that's just because of the size. Um, there's going to be a lot going on that day, a lot of anticipation.
Another thing I've been looking at, we have a dozen leveraged ETFs for SpaceX that are going to be coming out really soon. I don't think they're going to be day one, but uh maybe as soon as next week. This is almost unheard of. And just a word of warning, uh if you're looking for one of those 2X uh up or 2X bear products, you got to be careful because these are meant for short-term investors.
Thinking bigger picture about SpaceX, one thing I was noting is sometimes these big IPOs, they top tick the entire market. So I have a graphic up here on the Wi-Fi interactive. This has happened a few times, like with uh with Bitcoin, it happened twice in the late teens and also 2021.
So we had Bitcoin up 602% ahead of the first CME Bitcoin futures contract. As soon as it was issued, Bitcoin plummeted two-thirds. And then uh with Coinbase, it was up four 450% before Coinbase uh did its direct listing. wasn't an IPO but direct listing, then coin then uh Bitcoin crashed 52%.
We saw this in the Nasdaq bubble with the Palm IPO in 2000, the Rivian IPO in late 2021, even in commodities and Glencore when it IPOd, I think it was 2012. So this is a big test for the market. There are lots of concern. Are these three big IPOs starting with SpaceX going to suck money out of the system? Um, and leave everybody else hanging? We're going to have to see.