Every few years, a “can’t-miss” stock story seems to take over the financial headlines. Friends start texting screenshots, social media fills with hot takes, and it can feel like everyone is about to get rich except you. Whether it was the dot‑com darlings of the late 1990s, social media and ride‑sharing IPOs, or today’s space and AI leaders, mega IPOs have a way of grabbing our attention and tempting us to abandon a disciplined plan. The names change, but the pattern is remarkably familiar: big story, big hype, and very often, disappointing results for late‑arriving investors.
History shows that even the largest, most exciting IPOs can be disappointing investments: the 10 biggest U.S. IPOs since 1999 all had negative returns one year after going public, with an average loss of more than a quarter of their value. That’s a stark reminder that high-profile offerings often reward early insiders more than new public shareholders.
In the three years before a company becomes one of the 10 largest in the U.S. market, it has dramatically outperformed the S&P 500 on average, but over the five years after joining the Top 10, those same stocks have lagged the market. In other words, by the time a story is this big, the good news is usually already in the past, and future returns tend to be already priced into.
SpaceX itself is a good example of why IPO investing can be both difficult and speculative. Recent disclosures and independent analyses estimate SpaceX’s 2025 revenue at under 20 billion dollars, up from roughly the low‑teens billions in 2024, impressive growth, but still a fraction of the sales at mature companies like Toyota, CVS Health, or UnitedHealth Group, each of which generates well over 250–300 billion dollars in annual revenue.
Starlink appears to be generating strong profits, but those earnings are being offset by heavy spending on rockets, satellites, launch capacity, and new artificial‑intelligence initiatives, leading to large swings in reported income from year to year. When you combine a young, capital‑hungry business model with a hoped‑for valuation that bakes in many years of flawless execution, you end up with a stock whose future depends on a very narrow path. That’s not the type of risk we need to take to reach your goals.
Our planning approach is to diversify broadly across thousands of companies, avoid concentrated bets on any single stock or sector, and let your cash‑flow‑based financial plan drive investment decisions... not media excitement. The evidence from both the IPO history chart and Dimensional’s long‑term research reinforces a clear recommendation: we will not be buying the SpaceX IPO in client accounts and instead will stay focused on a globally diversified portfolio aligned with your financial plan.
If this IPO has you thinking about your own investment strategy, it may be a good time to revisit your financial plan and confirm that your portfolio is still aligned with what matters most to you.
Bonus: Check out the Fun Facts in the SpaceX Filing.
If you want to see some wild statements, goals and objectives, find time to read Space X S1 Filing at the SEC. The claims and incentives outlined are pretty wild.
Example - The filing outlines massive performance awards for the CEO, explicitly stating that Musk could be granted one billion additional shares, worth well over half a trillion dollars if he manages to establish a permanent human colony on Mars consisting of at least one million people and helps the company reach a $7.5 trillion market cap.