Elon Musks SpaceX is set to shatter IPO records but experts warn regular investors should be wary

SpaceX looks poised for a record-setting stock debut on the stock market — but some experts warn that retail investors should think twice before buying into Elon Musk’s firm at the peak of its trading frenzy.Elon Musk’s rocket company, known for its Starlink satellites, aims to raise a record $75 billion at a staggering $1.8 trillion valuation when its stock prices around $135 a share late Thursday and begins trading on the Nasdaq on Friday under the ticker SPCX.That’s despite the fact that SpaceX disclosed $4.9 billion in losses last year alone on revenue of $18.7 billion – with the gap expected to get worse as Musk pursues costly moonshot goals that include a colony on Mars and building AI data centers in space.Analysts at investment firm Morningstar said they believe the company “has been significantly overvalued” and has set its own estimate at $780 billion – roughly half of what SpaceX is seeking from investors.“Investors will have opportunities to buy the stock at more attractive levels after the IPO,” Morningstar analysts Nicolas Owens and Suryansh Sharma said in a blog post.SpaceX’s current valuation is “contingent upon paving the way for novel revenue streams, such as orbital computing,” according to Morningstar.

While they are plausible in time, their “viability, timelines, and financial outcomes remain highly uncertain.”Even the most successful IPOs often experience a day-one “pop” on overall excitement about the stock, only to fizzle out as insiders begin selling.Those risks are higher in the AI era, with “Big Short” investor Michael Burry and others warning markets are in the midst of a major bubble.Traders who buy shares in an IPO during the first day of trading and hold their shares for a period of three years saw an average return about 21% lower than if they had invested on a value-weighted market index, the Wall Street Journal reported, citing data from University of Florida professor Jay Ritter.Ritter’s da...