Investors seem juiced about the June 12 public offering of SpaceX, Elon Musk’s rocket company. Demand for the shares seems strong, with the added drama that a big pop in the value of the company could boost Musk toward trillionaire status.
But there’s no reason any ordinary investor should be clamoring for shares of SpaceX, or should feel left out if an effort to buy shares near the opening price fails. Public offerings are hit or miss, and early exuberance over an IPO often brings buyer’s remorse.
Part of the allure of SpaceX is Musk himself, given that his electric-car startup Tesla has made many shareholders rich. But Tesla didn’t start out as an overnight success. It was a money loser when it went public in 2010, and didn’t become profitable for a decade. One year after going public, Tesla’s stock was an underperformer, up by 22%, compared with 30% for the S&P 500 index. It didn’t break out and become a fast-riser until its third year as a public company.