SpaceX, led by CEO Elon Musk, is preparing for its IPO on Nasdaq, aiming to sell 555.6 million shares at $135 each, which would make it the largest IPO ever. However, an analysis by Canaccord Genuity reveals that historically, major IPOs do not correlate with market peaks.
The study examined the performance of seven significant IPOs since 2008, finding that the Nasdaq Composite index gained an average of 10.9% in the year following these IPOs, while the S&P 500 rose only 1.1%. In contrast, the IPOs themselves averaged a decline of 4.2% in their first year.
Notably, while companies like Facebook and Alibaba faced substantial losses, ARM Holdings was a standout performer, more than doubling in value. The upcoming SpaceX IPO occurs amid a stock market rally that has raised concerns about its sustainability, with Goldman Sachs noting that while speculative behavior often indicates market peaks, current conditions do not align with historical downturns.
The Nasdaq has recently adjusted its rules to facilitate the inclusion of IPOs like SpaceX into its benchmark index, potentially increasing investor interest through ETFs like the Invesco QQQ Trust. Meanwhile, S&P Global has blocked SpaceX's rapid entry into the S&P 500, which could affect its market dynamics