By Lisa Schreiber
For decades, the initial public offering (IPO) has served as a defining milestone for companies seeking access to public capital markets. Yet a new era of mega IPOs is emerging, as companies remain private longer and achieve unprecedented valuations before ever accessing public markets.
Few companies illustrate this shift better than SpaceX. With a private valuation exceeding hundreds of billions of dollars and investor demand rivaling some of the largest public companies in the world, SpaceX has become one of the defining examples of this new IPO landscape.
Its anticipated public offering, expected on Friday, June 12th, is among the most closely watched in financial history, raising important questions about valuation, structure, and process.
An initial public offering is the process by which a private company sells shares to public investors for the first time and begins trading on a stock exchange. Before the offering, the company works with investment banks, known as underwriters, to determine a valuation, establish an offering price, and market the shares to institutional investors through a roadshow process.
Once pricing is finalized, shares are allocated to investors and begin trading on the open market, where supply and demand determine the stock’s price.1
The rise of mega IPOs reflects a broader shift in capital markets. Companies today have greater access to private funding from venture capital firms, private equity investors, sovereign wealth funds, and private market platforms. As a result, many firms are choosing to remain private for longer periods, allowing them to achieve significantly larger valuations before pursuing a public listing.
This trend has contributed to a growing pipeline of highly valued private companies that could eventually come to market through IPOs.
To put the scale of the SpaceX IPO into perspective, it is useful to examine some of the most significant IPOs in market history. Alibaba’s 2014 public debut raised approximately $22 billion, setting a record at the time and underscoring investor enthusiasm for dominant technology platforms.
Facebook’s 2012 IPO marked a pivotal moment in the evolution of social media as a business model. Saudi Aramco’s 2019 listing became the largest IPO in history, highlighting the scale global capital markets can absorb when a highly valued enterprise comes to market.2
The SpaceX IPO combines elements of all three — Alibaba’s growth narrative, Facebook’s cultural relevance, and Saudi Aramco’s sheer scale — creating a public offering unlike anything the market has previously seen. And it’s also a unique one in many aspects: 3
- SpaceX planned to allocate ~30% of its shares to retail investors. Traditionally, allocation for retail investors is much lower, between 5% and 10%.
- SpaceX has a set IPO price of $135 per share instead of a range where the final price is determined.
- SpaceX is set to raise about $75 billion – making it the largest IPO in history.
Despite initial investor excitement, longer-term returns after a company went public can be more muted. US IPOs have averaged approximately 6% annualized returns over the three years following their initial listing. That’s nearly half of the return of the total US stock market. This does not imply that investing in IPOs or shortly after listing is inherently unattractive, but it does provide important historical context.
Investors should approach newly public companies with measured expectations, recognizing the elevated volatility and uncertainty that often accompany the transition to public markets.4
While the excitement surrounding large IPOs can be compelling, history suggests investors should balance enthusiasm with discipline. Valuation, business fundamentals and long-term growth prospects ultimately matter more than the initial market debut.
As the IPO market continues to heat up this summer, Gradient Investments will closely monitor developments and communicate any portfolio implications as opportunities arise.
1 https://marc.deschenaux.com/articles/the-ipo-process-the-initial-public-offering-process/
2 https://www.investopedia.com/articles/investing/011215/top-10-largest-global-ipos-all-time.asp
3 https://www.cnbc.com/2026/06/09/spacex-ipo-explained-stock-price-date.html