Digital Capital

Charting the path to millionaire | Not financial advice

[Digital Capital @DigitCap]

@PolymarketMoney What does that even mean? 😂

[SpaceX @SpaceX]

Teams are go for launch with a $135 price per share for the SpaceX IPO → https://t.co/HlsF4GxRbI

[Kalshi @Kalshi]

JUST IN: Retail investors are dumping AI stocks to buy SpaceX

[Results @ResultsOOO]

"One Reason to Buy the SpaceX IPO and Three Reasons to Avoid It"

🇺🇸 🚀 The SpaceX IPO May Not be the Best IPO to Buy this Year, which, by the way is heading for the Biggest Year for IPOs in History.

Massive AI companies are planning their public debuts, and that starts with SpaceX (NASDAQ: SPCX).

The SpaceX Numbers
SpaceX will offer about 556 million shares at $135 each, raising approximately $75 billion.
An abnormally large chunk of those shares, about 30%, could be held for retail investors.

Given the massive size of the IPO, Investors have a good chance of receiving shares of the highly anticipated stock.

> Here is one reason to buy the SpaceX IPO and three reasons to avoid it.

> Here's what you can expect from SpaceX's debut

🚀 The Top reason to buy SpaceX at its IPO price is that it'll likely experience a first-day pop.
It's very common for underwriters to leave some money on the table, and a successful IPO usually results in the stock trading 10% to 25% higher on the first day of trading.

🚀 But friends, a first-day pop isn't always guaranteed, however.

> Some stocks trade pretty close to their IPO price once the market digests the new issue.

🚀 However, investors considering buying shares to capitalise on the potential pop could monitor pricing on Hyper-liquid, a market for perpetual futures (futures that never expire).

The Price for SpaceX futures on the market is about $155 as of this writing, implying about 15% upside from the IPO price.

🚀 Investors may be able to flip the IPO for a quick profit, but that's a risky investment with minimal upside.

Here's why it might make sense to take a wait-and-see approach with SpaceX.

Should you avoid the IPO?

🚀 There are several reasons why avoiding the SpaceX IPO may be your best option.

> 💰 The company looks overvalued

SpaceX is a highly speculative investment that requires investors to make big guesses about how the future will unfold.

> 💰 But even optimistic outlooks indicate that $1.75 Trillion may be way Overvalued.

🚀 Aswath Damodaran estimates SpaceX's Enterprise Value at just $1.22 trillion but admits a $1.75 trillion valuation is within the realm of possibility based on his outlook.

> That said, his outlook already looks very optimistic, with the company capturing a significant share of the enterprise AI market and the entire space-launch industry growing rapidly over the next decade.

🚀 Morningstar Analysts put a $780 Billion Fair Value Price on the company, but even under their most optimistic scenario, it's worth only slightly more than the IPO price.

🚀 If the company successfully scales its rapidly reusable Starship and the economics of orbital AI compute prove valuable to hyper-scalers, it could be worth $2 Trillion, according to Morningstar's estimates.

> The market could be flooded with shares within six months

🚀 SpaceX's 556 million shares represent just over 4% of the entire company.
While SpaceX is planning a 'staggered Lock Up period' to avoid adding too much selling pressure on the stock at once, each tranche could still trigger a major selling event.

Even if it doesn't, the market will likely anticipate it and Sell-Off shares ahead of the actual liquidity events.

🚀 That will create some significant volatility in the stock over the next six months. And with more shares likely to enter the market as early investors cash out, there will likely be more sellers than buyers even with the preferential treatment SpaceX is receiving from indexes, forcing passive investors to buy shares from sellers.

That will put some significant downward pressure on the stock price.

> The track record for IPOs

🚀 Recent IPOs have Underperformed the rest of the market.

From 2011 through 2024, the 1,724 stocks making their public debut have produced a Weighted-Average Return of Only: (-1.7%) in the year following their first day of trading.

🚀 The Record for Extra-Large IPOs is even Worse.

The more mature and well-known a business is, the more likely it is to experience returns that severely trail the market average.
SpaceX is a 24-year-old business generating tens of billions of revenue, so the odds are against it.

🚀 Overall, Investors are likely better off waiting to invest in the SpaceX IPO.

> Buying at the IPO price could provide an opportunity to capitalise on the first-day pop, but that's outweighed by the uncertain medium and long-term outlooks and the track record for large IPOs.

> I personally am waiting, as I'm a long term Investor of small packets, and prefer to let them sit in the Markets, so they can do their Capitalist work.

As the saying goes, "It's Time in the Markets that make you most of your Money, Not Timing the Markets".

Have a great day.
kiwi ♥️🚀

[TheStreet @TheStreet]

Should you buy the SpaceX IPO? @danielnewmanUV breaks down whether $135 is fair, what to do on day one, and what the valuation could look like five years out. 🚀

#spacex #space #IPO

[Digital Capital @DigitCap]

@interesting_aIl Good ol Bill Gates always looking for new ways to wipe out the human race. Something to be said for consistency.

[Digital Capital @DigitCap]

@washingtonpost The concrete looks power washed, much cleaner and less yellow.

[Digital Capital @DigitCap]

@liquid_gary @GuyTalksFinance Munger was a financial genius in many ways.

[Digital Capital @DigitCap]

@b_co_co Buffett doesn’t run Berkshire Hathaway. He retired last year.

[THE DIVIDEND DOMINATOR @TheAlphaThought]

Friendly reminder: every correction in market history has been followed by a new all-time high.

Every single one.

The investors who got wealthy weren't smarter.

They just refused to sell when it felt terrifying to hold.

[Digital Capital @DigitCap]

@b_co_co The trick is avoiding lifestyle creep by continuing to live paycheck to paycheck, and creating boring habits to set yourself up with consistent payments to investments regardless of market conditions. This is how I am becoming a millionaire, and you can too. Follow for more.

[Digital Capital @DigitCap]

@b_co_co Every time I get a raise, add the difference to my investments. Every time I get a stimulus check, add to investments. Every time I get a tax return, add to investments.

[THE DIVIDEND DOMINATOR @TheAlphaThought]

Most people never get rich because they quit during the stage that looks like nothing is happening.

Here's what each stage of building wealth actually feels like and what's secretly happening behind the scenes:

[World of Statistics @stats_feed]

5 housing statistics that explain why your generation can't afford a home 🧵

[WOLF @WOLF_Financial]

$40 invested every week at a 10% return will 50 years later end up being worth

$2.53 Million

[Digital Capital @DigitCap]

@TheBTCTherapist I want the 100 $BTC that is currently worth $6 mil. I would leave 5% in $BTC, put 5% in Robinhood for individual stock picks and upcoming IPOs, put 5% in an interest bearing cash account, split the rest between $VOO & $QQQ, and retire.