Elon Musk’s rocket and satellite company SpaceX is set to file for an initial public offering (IPO) with the Securities and Exchange Commission, with a possible valuation of $1.75 trillion, according to sources. The firm could aim to raise up to $75 billion in its debut, making it one of the largest IPOs in history.
For investors, getting in on this ground floor can be enticing, but experts warn that there are risks involved. Historically, stocks have increased by an average of 19% from their offering price on the first day of trading, but about 25% decline in value. Experts advise doing homework on how these stocks tend to behave before investing.
Here are three key factors to consider:
1. **Float**: A low float can be a red flag for companies with historically poor performance. SpaceX’s planned 5% float is considered “tricky territory.”
2. **Sales**: Companies with at least $1 billion in sales over the previous 12 months tend to perform better after an IPO.
3. **Portfolio role**: Experts recommend avoiding betting on a single IPO stock and holding it as part of a diversified portfolio.
It’s also smart to speak with a financial advisor before making any changes to your portfolio. With SpaceX’s planned IPO, investors will need to be cautious and do their research to make informed decisions.
Source: https://www.cnbc.com/2026/04/02/how-to-invest-initial-public-offering.html