SpaceX is poised to make the biggest public debut on record, but traders raring for a piece are in for a rough ride — at least for the first year. A review of 30 major initial public offerings over the past 15 years shows stocks tend to fall and suffer severe drawdowns in the first year, according to data from Truist Wealth. On a median basis, they’ve dropped 9% 12 months after their public debut, meaning not even half of the companies closed out the year in positive territory. On average basis, however, the stocks have gained 14% one year after their launch. They’re also highly volatile, with the majority of companies dealing with major drawdowns in their first 12 months on the public market. All 30 companies saw their stock price plunge 54% on a median basis, and 55% on an average basis, according to the firm. The historical precedent could give investors some idea as to the volatility they could expect around SpaceX, which is expected to go public as a megacap despite being currently unprofitable, and as retail interest in a newly public company reaches a fever pitch. The rocket and satellite company is expected to raise $75 billion at a $1.75 trillion valuation . That would mean it goes public as one of the top 10 largest public companies — ahead of Meta Platforms ; Tesla , another of Elon Musk’s companies; and Micron Technology . Retail interest is another factor that could drive significant volatility around the stock. SpaceX plans to make as much as 30% of its shares available to individual investors, when, according to Fidelity , the institutional-to-retail split for IPOs was historically at 90/10. “The projected size and retail participation are likely to drive significant volatility alongside excitement around the SpaceX IPO,” Keith Lerner, investment chief at Truist Wealth, wrote on Tuesday. Many highly anticipated IPOs in the past had a rough start. The 2012 IPO of Facebook-parent Meta Platforms was widely panned as a debacle, with the social media giant, which was priced at the high end of its range, falling 31% one year after its debut. It took more than a year for the stock to climb above its debut price. Alibaba, which has held the crown for largest IPO in history , was down 30% in the 12 months after its IPO. It dropped 58% at one point. SpaceX is expected to make its debut on the Nasdaq on June 12. — Deena Zaidi contributed to this report.
