Is investing in the SpaceX IPO a safe bet for you and your 401(k)?
SpaceX stock is expected to go to the moon once the company starts selling to the public. Should your investments follow suit?
SpaceX stock is expected to go to the moon when the company first goes on sale to the public on June 12, and some advisors say they’re going for the ride.
SpaceX’s initial public offering (IPO) price of $135 for 555.5 million shares means that the company and CEO Elon Musk value SpaceX at $1.75 trillion, even though SpaceX lost about $4.9 billion in 2025 and an additional $4.3 billion in the first three months of 2026. At that value, SpaceX would be the largest IPO in history, far surpassing the previous largest IPO. – Alibaba sold $22 billion on the New York Stock Exchange in 2014.
SpaceX stock will be listed on the Nasdaq exchange under the ticker SPCX.
The IPO has already generated a lot of buzz, fueled by how quickly the stock will be included in major indexes. Earlier this year, SpaceX’s inclusion in the Nasdaq 100 and Russell 1000 was fast-tracked. SpaceX is expected to join the Russell 1000 in just five business days after its initial public offering, and could join the Nasdaq 100 as early as 15 business days later. That means funds that track these indexes will need to buy SpaceX stock to fund their retirement.
Some investors are worried about how such huge losses will affect their nest egg, but most analysts say there is no need to worry.
“The key factor to keep in mind is free float,” said Alex Michalka, vice president of investment research at financial platform Wealthfront. “This measures the number of shares that are actually available for public trading, as opposed to total market capitalization, which counts all shares in existence.”
What is free float? Why is it important?
Using only SpaceX’s free float, or the number of shares actually available for public trading, reduces the company’s weight in the index.
“Companies could dominate the headlines but enter broad indexes with a relatively modest initial footprint,” said Dina Ting, head of global index portfolio management at investment firm Franklin Templeton.
For example, FTSE Russell’s own preliminary analysis of SpaceX assumes a total market cap of $1.5 trillion, but Ting said the available market cap is about $70 billion, giving it an estimated weight of only 0.11% in the Russell 1000 index.
Advisers said such a small initial weighting should not significantly change someone’s diversified holdings.
SpaceX’s weight could increase over time as lock-up restrictions that typically prevent founders, employees and early investors from selling their shares immediately after an IPO expire. If or when these “insiders” sell stock, more shares may enter the public market, increasing a company’s index weight.
Does SpaceX have any impact on 401(k)s and IRAs?
If 401(k)s and IRAs invested in either the Nasdaq 100 or Russell 1000 indexes must buy SpaceX stock, investors should expect some short-term volatility, the advisers said.
“Given this level of excitement, it’s understandable that many see this as a high-return opportunity, but it’s important to remember that newly public companies are historically volatile,” Michalka said. “Additionally, no real historical benchmark or comparable company exists to value this, as no company has ever gone public at this valuation with the exact mix of business lines spanning aerospace, social media, and artificial intelligence.”
As with the normal IPO process, stock prices are likely to rise if funds have to buy shares, but could come under pressure when insider lockups expire, said Armando Pantoja, a financial and technology expert known online as Tall Guy Tycoon.
“If you can handle the volatility and understand the risks over the long term, this stock has extraordinary potential,” he said. What Musk hopes SpaceX will do is “something that can change human civilization.”
“You may also get a better price if your fund manager buys the shares for you, instead of you chasing them alone on the open market,” said Steve Azzury, a financial advisor and founder of Azzury Financial. “Those guys might buy 10 million shares, so you might get the IPO price.”
At the end of the day, Azzury predicts that unless your portfolio is diversified and SpaceX is a significant part of it, your bet on Musk will probably pay off.
“This guy has a track record,” Azzury said. “He’s the richest man in the world. He must know what he’s doing. Come along for the ride.”
Medora Lee is USA TODAY’s money, markets and personal finance reporter. Please contact us at mjlee@usatoday.com. Subscribe to our free Daily Money newsletter for personal finance tips and business news every Monday through Friday..
