(AP file photo)
[Financial Channel/Comprehensive Report] SpaceX was officially listed last Friday, immediately triggering a rush by retail investors. According to a report released by Vanda Research, retail investors net purchased more than US$117 million (approximately NT$3.7 billion) in the secondary market on the first day of SpaceX’s listing, accounting for 56% of the total net purchases of individual stocks by U.S. retail investors on that day.
In this regard, foreign media pointed out that for investors, the real question is no longer whether SpaceX is a great company, but at what price should be bought for this decades-long growth story. This can be seen from the experience of the Dutch East India Company more than 400 years ago. Even if it is a new frontier that truly changes the world, it does not mean that investors can ignore the opportunity to enter the market.
The report pointed out that SpaceX is not only a rocket company owned by Musk, but also connects satellite communications, Starlink, national defense needs, space infrastructure, and the huge imagination of the future orbital economy. Therefore, more than half of the retail investors' stock-buying funds in the current market are flowing to SpaceX. This not only shows the market's high imagination of the space economy, but also gives this epic IPO an extra layer of warning signals: when everyone is rushing to get on board, price is often the biggest risk.
Foreign media stated that the Dutch East India Company (VOC) was behind the fleet, trade routes, military power, government support, and a huge new commercial frontier that was opening up. It began stock trading in 1602 and was regarded as one of the important players in promoting the formation of the Amsterdam Stock Exchange. It also allowed investors at that time to participate in the huge business opportunities of global trade through stocks for the first time.
By modern market standards, VOC's stock price did not skyrocket as soon as it was listed. It took about 30 years for the stock price to double. The process was long and slow. For this reason, JC Parets, a chartered market technology analyst and founder of TrendLabs, believes that if you want to find a historical analogy for SpaceX, the best one is not necessarily another popular technology IPO, but may be the Dutch East India Company.
VOC dispatched spice fleets to Asia back then. This was of course far different from building rockets, satellites and space infrastructure today, but the market logic was similar. VOC allows investors to buy into the future of global trade without physically boarding a ship; SpaceX allows investors to buy into rockets, satellites, defense contracts, Starlink, space infrastructure, and all the imaginations that may develop in the future orbital economy without having to launch their own rockets.
The problem is, a great story doesn’t equal a great entry. SpaceX attracted a large amount of buying from retail investors on its first day of listing, which to some extent highlights this risk. When a company has Musk's halo, space economic imagination, national defense and satellite network themes, plus a historically high IPO scale, it is easy for the market to directly equate "the future is big" with "it is time to buy now."
But IPO history is usually not that simple.
Jay Ritter of the University of Florida analyzed corporate IPO data and found that between 1975 and 2021, more than 9,000 operational companies completed IPOs; among them, 60% had their stock prices remain flat or fall within 3 years after listing, and only 16% had their stock prices more than double.
Kathy Donnelly, co-author of "The Lifecycle Trade: How to Win at Trading IPOs and Super Growth Stocks," also made similar observations from the trading side. There are not many stocks that can really rise more than 100% quickly after IPO. Most IPOs will fall below the first day low within 3 weeks, and most will fall by more than 10% within 10 weeks.
In other words, investors usually have a second chance to get on board, and there is no need to rush to catch up on the first day. Especially when a new stock becomes the most crowded transaction for retail investors on the first day of listing, the short-term stock price may reflect not only the value of the enterprise, but also emotions, scarcity and "fear of missing out".
History also shows that large IPOs can often appear at the end of hot deals, which increases the risk that the popularity of new stocks will cool down within a few months after listing. Many giant IPOs in the past have appeared near important market turning points, including U.S. Steel in 1901, RCA in 1919, Ford in 1956, Blackstone in 2007, Coinbase in 2021, and Rivian, also listed in 2021.
Before the IPOs of U.S. Steel and RCA, the Dow Jones Index experienced a period of gains, but Parets reminded that after the IPOs of the two companies, the Dow Jones Index later fell in half.
The report pointed out that these historical cases do not mean that SpaceX is just market hype; the key is that SpaceX has real revenue, reusable rocket technology, Starlink satellite network, government and defense needs, and space infrastructure capabilities that other companies are difficult to copy. Its commercial foundations were as real as the fleets, spices and trade routes that supported the Dutch East India Company.
The real lesson for investors is more precise: Even a truly great new frontier can punish too hasty an entry.
The crazy rush of retail investors on the first day of SpaceX’s listing shows that it is no longer just a corporate listing, but a capital market vote of the people’s imagination. Investors are not only buying today’s rocket launch capabilities, they are also buying future space networks, lunar and Mars missions, orbital data centers, defense technology, and the next round of business order that may emerge in the entire space economy.
However, the most cruel thing about the stock market is that the company can be great, but the stock price can still be too expensive; the industry can be very promising, but investors may still buy in an undesirable position.
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