Last month, Elon Musk's SpaceX completed its long-awaited initial public offering, or "IPO."
Maybe you bought in, maybe you didn't, or maybe you're like a lot of people and wondering what the heck an IPO even is.
Leading up to the IPO, Google search interest had risen over 300% compared to this time last year.
Let’s start there… what is an IPO?
An IPO, or initial public offering, is the process of a private company becoming publicly traded. In simple terms, it is the first time most everyday investors can buy shares of that company on a public stock exchange. Companies often use an IPO to raise money, expand their business, or allow early investors and employees to sell some of their shares.
Why was the SpaceX IPO such a big deal?
For starters, it’s an exciting company with a polarizing leader. Everything about the SpaceX IPO makes for a good headline and drives clicks.
Second, the scale of this IPO was unlike anything we’ve ever seen before. The trend has been for companies to stay private for longer and delay going public, if they go public at all. SpaceX represents that trend, culminating in the largest IPO in history. The market capitalization soared to more than $2 trillion on the first day of trading. For context, that’s larger than Meta, Walmart, Exxon, and Musk’s other company, Tesla. Since then, it’s been a volatile ride, to say the least.
Okay, so the SpaceX IPO has come and gone… why are we talking about it?
There are a few IPOs coming down the pipe that will likely generate a similar level of buzz: Anthropic and OpenAI. Both are huge private companies and giants in the artificial intelligence space.
Your guess is as good as mine as to what the long-term performance of these stocks will look like. However, we can be fairly confident that there will be headlines and volatility once again.
There are three things I would keep in mind when evaluating whether or not to get involved in an IPO.
1.) Timing Matters... A Lot
This graph compares the average three-year return of IPO shares bought at the offering price, IPO shares bought at the end of the first trading day, and the broad U.S. stock market over the same period.
When a company goes public, there are essentially three groups of investors:
1. Early investors and company insiders who already own shares
2. Institutional and retail investors who are allocated shares at the offering price
3. Everyone else
Statistics provided by the University of Florida show that investors who receive shares at the offering price fare much better than those who buy later in the frenzy of the first day. If you can't get in on the ground floor, is it worth it?
Furthermore, the same statistics imply that both groups could be better off by simply buying and holding a broad U.S. market index fund.
2.) Be Wary of Your Own Biases
Like every other aspect of personal finance, a decision to participate in an IPO can be an emotional one. In the video below, Brendan Frazier does an excellent job explaining how our own biases can creep in and derail our decision-making:
3.) Don't Lose Sight of the Forest for the Trees
It is easy to get caught up in the excitement of a well-known company going public, especially when it feels like everyone is talking about it. But an IPO should still be evaluated in the context of your overall financial plan.
Does it fit your goals? Does it fit your risk tolerance? Are you buying because you believe in the long-term investment case, or because you’re afraid of missing out?
There’s nothing wrong with being interested in an IPO. Just make sure a single exciting investment opportunity doesn’t distract from the bigger picture.
Life Update
Exactly two months ago, I married my best friend.
Katherine and I were able to celebrate on a beautiful Memphis evening surrounded by friends and family, and I wanted to share a few pictures from such a special night.
We are so excited to build a life together and are incredibly thankful for the trust, encouragement, and support of each and every one of you.
Sources:
• Google Trends (trends.google.com)
• Jay R. Ritter, Initial Public Offerings: Updated Statistics, Warrington College of Business, University of Florida, updated June 18, 2026.
All investing involves risk, including the possible loss of principal. Past performance does not guarantee future results. References to specific companies, investments, or market events are for informational and educational purposes only and should not be considered a recommendation or solicitation to buy or sell any security. Indexes are unmanaged, shown for illustrative purposes only, and cannot be invested in directly.