The shadow market indicates that SpaceX's first day surged over 35%, while Asian investors, unable to participate directly, have flocked to supply chains, ETFs, perpetual futures, and other "curve alternatives." But history warns: in the past 15 years of major tech IPOs, the average drawdown within a year was 55%.

Source: Golden Ten Data

The pricing signals from the shadow market show that SpaceX (SPCX), led by Elon Musk, may see significant gains as it enters the public market.

Multiple data points from derivatives, crypto trading, and prediction platforms point to the fact that this company, covering rockets, satellites, and artificial intelligence, may far exceed its issuance pricing on its first day.

The derivative quotes provided by online brokerage IG International indicate that during Friday's Singapore trading session, SpaceX's implied overall valuation has been pushed to around $2.4 trillion. Based on the IPO pricing of $135 per share, corresponding to $1.77 trillion, this level signifies a rise of over 35%.

Trading data from the crypto market also provides a reference. On the Hyperliquid platform, perpetual futures contracts linked to SpaceX are quoted at about $174, corresponding to a company valuation exceeding $2.2 trillion. The trading volume of that contract reached $143 million in the past 24 hours, with an open position size of approximately $208 million.

In the prediction markets, Polymarket traders' judgments further strengthen this expectation. Data shows that there’s about a 70% probability that SpaceX's market value will exceed $2 trillion at the close of its first trading day.

This pricing expectation, formed through multiple channels, reflects the high demand in capital markets for assets in both the artificial intelligence and space infrastructure sectors. If SpaceX achieves a strong start, it may set a precedent for subsequent potential IPO projects, including companies like OpenAI and Anthropic PBC, which are expected to validate the trillion-dollar valuations in the public market.

IG International market analyst Fabien Yip stated:

“The demand for the IPO has been very strong, and pre-IPO trading has attracted significant interest. Even if valuations seem high, this is still our most popular pre-IPO trading to date. If the pre-IPO pricing momentum is maintained, it will set a precedent for the upcoming mega IPOs.”

However, in terms of short-term capital flows, if SpaceX makes a strong debut, it may divert attention from existing large tech stocks, including the "magnificent seven" and Tesla (TSLA). Meanwhile, its listing may also drive market performance for related supply chain companies, peers, and existing shareholders globally.

The Largest IPO in History, But Asian Investors Are "Left Out"! They Can Only Get Involved Through Supply Chains and ETFs

Amid the enthusiasm for SpaceX's $75 billion initial public offering, most Asian investors find it difficult to participate directly. This limitation on participation thresholds forces local funds to seek alternative paths to access related opportunities.

In the absence of IPO allocation channels, traders in places like Seoul have begun to shift towards indirect investment methods, including allocating to supply chain companies related to the space industry, investing in themed ETFs, and buying mutual funds tracking the Nasdaq 100 index, hoping to gain linked returns when SpaceX's stock price rises post-IPO.

The crypto market has also become an important receiving channel. Investors continue to drive up the prices of perpetual futures contracts linked to SpaceX, while some trading platforms have launched more complex derivative tools, providing alternative betting methods for funds that cannot participate in the primary market.

Vantage Global Prime analyst Hebe Chen pointed out: “We are seeing increasing interest from clients whose trading characteristics and risk preferences show an unusually diverse distribution. The level of interest surrounding SpaceX feels more like investors trying to snag a seat before the rocket leaves the launch pad, rather than general IPO inquiries.”

There are significant differences in participation conditions between markets. In the Asia-Pacific region, only Japan and Australia currently allow retail investors to participate directly in this IPO, while most other markets still exclude individual investors.

Retail Investors May Be "Burned"; Historical Data Shows an Average Drawdown of 55% Within 12 Months Post-IPO

Reuters columnist Jamie McGeever wrote that under high scrutiny, risks are accumulating, especially concentrated on retail investors. As subscription thresholds lower and participation channels widen, personal funds are flooding in at an unprecedented scale, but structural arrangements and historical experiences indicate that this enthusiasm harbors significant asymmetric risks.

In conventional large IPOs, retail investors typically receive no more than a 10% allocation, with the remaining shares mainly held by institutional investors. This distribution method somewhat cushions the impact of initial fluctuation on individual investors, as institutions possess stronger financial power and risk tolerance.

This time, SpaceX clearly breaks this convention. Of the total $75 billion in issuance size, about 20% of the shares will be allocated to retail investors. A higher participation ratio means individual investors will be more directly exposed to potential price fluctuations and drawdown risks that may occur in the early stages of listing.

From past data, this concern is not unfounded. Truist Advisory Services equity strategy analyst Sam Grelck's research on 30 large tech IPOs in the past 15 years shows that all these companies experienced double-digit declines within 12 months after the close on their first day of trading, with an average drawdown of 55%, and some stocks even seeing drops near 90%.

He warned: “Investors should be prepared to face higher volatility and potential significant drawdowns when participating in new stock listings.”

Further breaking down the timeline reveals that the first three months post-IPO generally still yield positive returns but exhibit significant volatility; overall performance tends to turn negative within six months to a year. This suggests that short-term gains often coexist with mid-term drawdowns, with the process fraught with uncertainty.

Meanwhile, the loosening of participation channels is accelerating retail entry. Fidelity has drastically reduced the account threshold for participating in the IPO from $500,000 to $2,000; Robinhood Markets, SoFi, and E*Trade even allow accounts to participate with no funds, while Charles Schwab's threshold is $100,000. Data from Vanda Research indicates that the stock buying power that typically rebounds following the U.S. tax season in April has not significantly appeared this year, partly due to investors preparing cash for the SpaceX IPO.

In terms of fundamental expectations, the growth paths projected by underwriters have also sparked debate. Goldman Sachs analysts expect total revenue for the company to grow from $18.7 billion last year to $474 billion by 2030, with artificial intelligence business revenue expanding from $3.2 billion to $322 billion. Ameriprise Chief Market Strategist Anthony Saglimbene commented: “By almost any reasonable standard, this is a bold assumption.”

Another underwriting firm, Morgan Stanley, offered a longer-term forecast, suggesting that the company's total revenue could reach $3.4 trillion by 2040. Such long-term expectations enhance market imagination while also amplifying the uncertainty of valuation realization.

Changes in institutional arrangements are also noteworthy. Typically, company employees must undergo a six-month lock-up period to sell their shares post-IPO, but SpaceX has waived this restriction. Some analysts point out that this may allow employees and early investors to choose to cash out shortly after the listing, transferring the selling pressure onto inexperienced retail investors.

Although potential internal selling may be partially absorbed by retail buying, this hedging is not guaranteed to occur. If buyer strength is insufficient and market prices decline, newly entering individual investors may suffer significant losses.

The overall market atmosphere surrounding this IPO has also sparked discussions about the cyclical position. Some believe that such highly concentrated enthusiasm may signal that the market is nearing its peak. However, BCA Research Chief U.S. Equity Strategist Noah Weisberger notes that historically, only about 20% of mega IPOs occur at market peaks.

It is worth noting that in the coming months, the market may also see more heavyweight IPO projects, including OpenAI and Anthropic, which are expected to reach valuations of $1 trillion. If SpaceX's listing performance is strong, retail enthusiasm for subsequent large IPOs may further increase; conversely, if performance falls short of expectations, individual investors who invested significant funds may face considerable drawdown pressures.