SpaceX’s expected public listing has become one of Wall Street’s most anticipated events, but the history of large IPOs offers a warning: a famous brand and record valuation do not guarantee market-beating returns. According to Reuters’ analysis of the 50 highest-valued IPOs of the past five years, investors would have been better off buying an S&P 500 index fund in roughly 75% of cases.

The average gain for an investor who could buy at the IPO price was 27% through May 21, compared with a 53% rise for the S&P 500 over the same period. For retail investors, the picture can be even harder. IPO allocations are often limited, and buying during a hyped first trading day may mean paying after the initial jump.

That context matters as SpaceX reportedly targets a valuation of about $1.75 trillion. The company offers a powerful story around rockets, Starlink, satellite connectivity and future space infrastructure. But Reuters notes that such a valuation could put its price-to-sales ratio near 100, while SpaceX posted a loss of almost $5 billion in 2025. The takeaway is not that SpaceX is a bad company. It is that even exceptional companies can be risky investments if the IPO price already assumes too much of the future.