The Bull And Bear Case For Buying The Spacex Ipo On Day One

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I'm not sure if you've heard, but a company is making its public market debut today.

The company is Elon Musk's SpaceX, and the debut is set to be historic. Thursday afternoon, SpaceX priced 555.6 million shares at $135 each, making history as the largest public offering of all time. The deal raised $75 billion for Elon Musk's rocket company and valued it at $1.75 trillion.

You can follow all our coverage on the SpaceX IPO here.

The high-profile nature of the IPO has sparked plenty of debate, but it ultimately boils down to a single question: Should you buy the stock on its first day of trading?

First Trade's Joe Ciolli and I are breaking down all things SpaceX IPO at 12:30 p.m. ET today. You can tune in here.

In the meantime, I broke down the points that supporters and critics are making about buying the stock on Day One.

Valuation

Supporters — Have you seen what investors are paying for AI these days? There are plenty of tech giants that looked expensive at the time, only to turn out to be a bargain. That size also means it'll be included in major indexes, in some cases almost immediately, which means lots of forced buyers.

Critics — $1.75 trillion is an astronomical number. According to one investing pro, SpaceX would need to grow revenue by 30x in four years to justify it.

Elon Musk

Supporters — When it comes to investing, I like having the world's richest man on my side. Bonus points for the fact that he's heavily financially incentivized to make this work. Will there be some ups and downs? Sure. But in the long run, Musk has been a good bet for Tesla investors on ambitious projects.

Critics — What about in the medium-to-short term? At Tesla, he's had a hard time landing some of its more grandiose plans recently. Also, you're not buying Musk circa 2016. This is a much more politically active and volatile guy. And don't forget the key-man risk factor.

The government risk

Supporters — NASA and the Department of Defense are key SpaceX customers. Government contracts are an asset, not a liability. Especially when it comes to literal rocket ships. That's not the type of thing a startup can easily spin up to compete with them on.

Critics — Musk's aggressive push into politics has ruffled plenty of feathers. Good luck navigating government contracts and regulations if and when the current administration changes and he's negotiating with less-friendly faces.

What even is SpaceX?

Supporters — Starlink might be SpaceX's key business line, but it's a lot more than that. Rockets? Satellites? AI? Social media? Whatever your preference, SpaceX has you covered thanks to its xAI acquisition earlier this year. And the beauty is that there is a lot of overlap, which allows for operational efficiency.

Critics — No, it's a Frankenstein's monster that's stitched together. If you're trying to be everything, you end up being nothing. Have fun explaining that to future investors.

Incoming IPOs

Supporters — Wait, you're giving me grief about SpaceX's valuation, but you're touting OpenAI and Anthropic? Have you seen those projected numbers? And who knows when they'll ultimately hit the market. In the meantime, I can mint returns riding the SpaceX rocket.

Critics — Buying SpaceX on Day One is like filling up on bread at the restaurant. The best stuff is yet to come. We've got OpenAI and Anthropic right around the corner. Why tie up all my money in the first big IPO out the door?

Pitching the "dumb money"

Supporters — Investing in SpaceX is about democratizing finance. Musk is allocating a lot more shares to retail investors than typical. He's trying to let the little guy in on the action! Mom-and-pop investors have shown out for Musk before, and often proven the "smart" money wrong in the long run.

Critics — There's an old saying, "I refuse to join any club that would have me as a member." Retail isn't getting access to this IPO out of the goodness of Wall Street's heart.