CONTRIBUTORS
Stephen Dover, CFA
Chief Market Strategist
Head of Franklin Templeton Institute
Taylor Topousis, CFA
Market Strategist
Franklin Templeton Institute
SpaceX’s record-setting initial public offering (IPO) marks an important moment for both private and public markets, and for US technology companies. Limited public stock float1, future lockup2 expiration, index inclusion dynamics and a wide range of potential business outcomes will likely keep volatility elevated for the stock. We believe strong returns and a seamless IPO process should set the stage for more mega-cap IPO listings over the next year.
- Largest IPO on record: SpaceX raised roughly US$85 billion, over three times the prior record set by Saudi Aramco’s US$25.6 billion IPO in 2019.3 The company priced at an approximately US$1.8 trillion market valuation.4
- Strong first-day demand: Shares finished 19% above the IPO price, reflecting significant institutional and retail demand for one of the most anticipated listings in recent history.
- Limited float should drive volatility: SpaceX listed 638 million shares (including greenshoe5), or roughly 5% of total shares outstanding. With such a small public float, trading volatility is likely to remain elevated until additional shares become available.
- Lockup expirations will matter: Early investor, employee, executive and affiliate shares are expected to become eligible for release over the next 180 days. Liquidity should improve over time, though unlock dates may create short-term selling pressure.
- Its business model carries a wide range of outcomes: SpaceX’s core businesses—space, connectivity, and artificial intelligence—are all on the frontier of technology. Calendar year 2025 revenue of roughly US$18 billion6 is modest relative to the valuation, so execution and the company’s ability to scale these businesses will be central to long-term returns.
- Index inclusion could create incremental demand: Nasdaq and FTSE Russell rule changes will fast-track SpaceX’s index inclusion, with Russell eligibility after five trading days and Nasdaq after 15 trading days. S&P Index inclusion appears unlikely for at least 12 months, limiting near-term demand from S&P-tracking passive funds.
- Investment impact: Given the combination of limited float, upcoming lockup expirations, index-related demand, and significant valuation uncertainty, we believe active managers are best positioned to evaluate entry points. More broadly, the success of the IPO will likely reopen the IPO market for other high-quality private companies, including anticipated listings from Anthropic and OpenAI.
SpaceX was chosen for this case study as it is the largest IPO in market history to date.
Endnotes:
- The number of company's shares that trade in public markets, a subset of a company's total outstanding shares.
- An equity lockup is a contractual restriction that prevents certain investors or insiders from selling or transferring their shares for a set period after an initial public offering.
- Source: Bloomberg. As of June 12, 2026.
- Source: Ibid.
- Greenshoe refers to an option for IPO underwriters to expand the number of shares they sell by up to 15% of the planned amount.
- Source: Space Exploration Technologies Corp. (SpaceX), Form S-1, U.S. SEC, filed May 20, 2026, Accession No. 0001628280-26-036936.
WHAT ARE THE RISKS?
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Investments in alternative strategies may be exposed to potentially significant fluctuations in value.
Diversification does not guarantee a profit or protect against a loss.
Equity securities are subject to price fluctuation and possible loss of principal.
Indexes are unmanaged and one cannot directly invest in them. They do not include fees, expenses or sales charges.
The investment style may become out of favor, which may have a negative impact on performance.
Investments in privately held companies present certain challenges and involve incremental risks as opposed to investments in public companies, such as dealing with the lack of available information about these companies as well as their general lack of liquidity.
Large-capitalization companies may fall out of favor with investors based on market and economic conditions.
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