NEW YORK (AP) – When SpaceX makes its debut on the U.S. stock market, it wants small, pop-up investors to play a big role in what could be the biggest IPO ever.
Elon Musk’s rocket company, formally known as Space Exploration Technologies Corp., is directing some of its public stock offerings directly to so-called “retail” investors. These are people who buy stocks from a brokerage account on their phone, not pension funds or other large “institutional” investors who submit orders to their professional trading desks.
Here are some things to keep in mind as the IPO approaches:
Part of the SpaceX stock will go to ordinary investors
Most IPOs contribute only 5% to 10% of the total offered to retail investors, according to Fidelity. In this case, however, it may be up to 30%. SpaceX expects retail investors to participate in its IPO through Charles Schwab, Fidelity, Robinhood, SoFi and Morgan Stanley’s E-Trade.
At Fidelity, investors with as little as $2,000 in their accounts can hold SpaceX shares in the IPO. That’s down from the $100,000 or even $500,000 account minimums Fidelity has for other equity offerings.
Demand from investors may be so high in this IPO that not everyone who shows interest will get a share.
Attempting a temporary flip has risks
Given all the hype surrounding SpaceX, the temptation can be high to grab shares from the IPO and sell them quickly if the commotion sends prices soaring. But brokerages have policies to block investors from futures offerings if they dump shares bought in the IPO too soon, like within a few weeks.
Big price changes are possible
Potentially high interest from retail investors following an IPO is one of the reasons SpaceX is warning that the stock price may fluctuate. These investors are known to tread carefully like a pension fund, which tries to build up cash payments that will last for years or decades into the future.
It’s retail investors, after all, who helped drive GameStop and other “meme stocks” to market in 2021 that professional investors call irrational.
IPOs can see a big first-day jump, but that may not last
The average IPO has seen a 7% jump in its first trading day, from 1980 to 2025, according to Jay Ritter, an IPO expert and professor at the University of Florida’s Warrington College of Business.
But IPOs tend to hold the same size as peers over the next five years, excluding their first trading day. They do this at an average of 3.6% per year, according to Ritter.
SpaceX is in debt and has been losing money
It’s expensive to launch objects into space and build massive AI data centers, and SpaceX has built up $29.1 billion in debt, as of the end of March.
The company also lost $4.9 billion last year and another $4.3 billion in the first three months of 2026. It admits that it “may not achieve profitability in the future.”
Over time, the stock price tends to follow how profitable the company is.
You don’t have to buy SpaceX to own one
You might end up owning one of SpaceX even if you didn’t mean to. Consider the many people who own shares in the popular exchange-traded fund QQQ, which tracks the Nasdaq 100 index and has approximately $460 billion in assets.
Historically, the Nasdaq 100 index would wait until each December to add new members to the annual renewal to ensure that it included the 100 largest non-financial companies in the Nasdaq. But Nasdaq recently made changes to allow larger companies to enter the Nasdaq 100 index after 15 trading days.
That means that if SpaceX’s IPO is as successful as expected, it could quickly join the Nasdaq 100 fund and QQQ, while QQQ holders are doing nothing on their own.
The company that tracks the most popular S&P 500 index, however, is not making changes that would allow SpaceX to enter quickly.
Any shares bought would take a back seat to Musk’s influence
In its IPO, SpaceX is offering 555.6 million shares of its “class A” stock. Each of these shares gives the investor one vote on matters decided by the shareholders. That includes weighty matters such as who is on the board of directors accountable to the CEO.
This IPO does not offer so-called “Class B” shares, each of which gives its holder 10 votes. Musk, on the other hand, owns so many shares that he could personally control more than 82% of all the voting power of the stock following the IPO.
In filings with US securities regulators, SpaceX admits there may be a conflict of interest between it and Musk, as well as other companies he owns, such as Tesla.
Some big investors don’t necessarily agree with the ownership structure
Officials from the pension funds of firefighters, teachers and other workers in California and New York sent a letter to SpaceX last month criticizing some of the provisions in its IPO, including “higher voting shares,” mandatory arbitration of shareholder claims instead of the possibility of lawsuits and how much power Musk will wield over the company.
They said they could own SpaceX stock because they own index funds, which automatically buy shares after they are included in certain indexes.
If Musk were able to control more voting power on the board of directors, that would give him too much power at the top of SpaceX, “making him fireable without his consent,” the CEO of the California Public Employees’ Retirement System, the New York state administrator and the New York City administrator wrote in their letter.
“This level of accountability is unheard of among any other major US producer whose governing documents prescribe accountability to public owners for these policies.”
Do not confuse SpaceX with other companies with similar names
SpaceX plans to trade under the ticker symbol “SPCX.” That’s pretty close to “SPCE,” which is the trademark of Richard Branson’s Virgin Galactic Holdings.
