The big day for Elon Musk's SpaceX is rapidly approaching. With SpaceX making its registration statement (S-1) public on May 20, the projected largest-ever initial public offering (IPO) has laid the groundwork to kick off its IPO roadshow on June 4 and debut its shares on the Nasdaq (NDAQ 2.27%) exchange on June 12.
The buzz surrounding the SpaceX IPO is thick enough to cut with a knife. Musk's company is seeking a $1.75 trillion valuation and is focused on Wall Street's two hottest addressable opportunities: artificial intelligence (AI) and the space economy.
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But don't count on SpaceX's IPO day (June 12) leading to the biggest surge in its shares. Thanks to a newly revamped rule, SpaceX stock can skyrocket on July 7. However, this doesn't mean it would be a good idea for retail investors to buy SpaceX stock after its debut.
A rule change could add hundreds of billions in market value to SpaceX stock on July 7
Although SpaceX is on track to demolish Saudi Aramco's $29.4 billion cash raise as the largest IPO in history, a significant change implemented by Nasdaq is likely to delay the fireworks.
Beginning May 1, 2026, companies that would rank in the top 40 market cap of the Nasdaq-100 will qualify for fast entry into the index after just 15 trading days. There's a strong possibility that this rule change played a major role in Musk's company's decision to list its shares on the Nasdaq.
Taking into account the Juneteenth (June 19) and Independence Day (July 3) holidays for the stock market, the 15th trading day, including its IPO day, is July 6.
Nasdaq has refined the Nasdaq‑100® methodology to better reflect today's market structure. "Public markets have evolved significantly over the past decade," says Emily Spurling, Global Head of Index.
-- Nasdaq (@Nasdaq) May 8, 2026
In our latest Q&A, Emily Spurling walks through what changed and why now.
🔗... pic.twitter.com/MUXIrfOuYP
Index funds that attempt to mirror the market-cap-weighted Nasdaq-100 will be required to purchase a jaw-dropping number of shares after this 15-day period comes to a close. Mandatory purchases from exchange-traded funds and index funds are estimated at $22 billion to $27 billion.
Given the milewide gap between SpaceX's outstanding shares and its initial post-IPO float, fund-driven buying following expected Nasdaq-100 index inclusion can send shares soaring.
Image source: Getty Images.
Avoid the temptation to chase the SpaceX IPO
While the variables are aligned for SpaceX to make history, historical precedent strongly suggests retail investors avoid Wall Street's hottest IPO.
Since the late 1990s, most mega-IPOs have stumbled out of the gate. With the exception of Visa, which rallied 23% in the six months following its March 2008 debut, most brand-name IPOs flop. Facebook (now Meta Platforms) lost 38% of its value six months after its IPO, while Saudi Aramco shed 15% in overseas trading over the same timeline.
SpaceX also comes with an unjustifiable valuation. Historically, companies at the forefront of Wall Street's hottest trends have consistently peaked at price-to-sales (P/S) ratios of between 30 and 45. SpaceX is readying to go public at a P/S ratio of nearly 94, based on its 2025 revenue and estimated $1.75 trillion valuation.
Several other factors point to this upcoming IPO eventually losing its buzz, including the company's sizable operating losses, highly capital-intensive operating model, and unimpressive growth rate for AI start-up xAI compared to OpenAI and Anthropic.
Retail investors would be wise to keep their distance and avoid this potential trap.
