What Snapchat Taught Me About the SpaceX IPO

In 2017, I vividly remember Snapchat's first day

Back then I hadn't traded a ton of stocks. I was watching the market, learning, fumbling my way through investing and trading. But Snapchat genuinely excited me. It was going to be the Facebook competitor, the game-changer that reshaped everything.

On IPO day, I watched it just rocket straight up — 20% in the first week. I thought, "This was easy money, I knew it." And then, over the following years, the stock proceeded to drop about 80% — in what was otherwise a pretty good bull market through 2017 to 2019.

The numbers behind the glamour: -55% over one year

This is where you step back and look at the data. Across the last 15 years, narrow it to 30 major IPOs, and the average one-year drawdown was roughly 55%. Names like Facebook and Alibaba are on that list.

What's interesting is that it isn't all negative. Over one-, three-, and six-month windows, plenty of them just opened and ripped. CoreWeave was up 300% three months in; Palantir 164%; Twilio 125%. These monsters pull the averages up so it looks like "the average three-month move is +20%." But that average is an illusion built by a few explosive names — and the one-year average drawdown is still about -55%.

Will SpaceX be different? My 'don't take me seriously' guess

Honestly, I won't personally be touching the SpaceX ticker. But I don't really have a choice either. Here's what I mean: SpaceX will be so impactful to markets that anyone exposed to NASDAQ or the S&P gets indirect exposure through passive flows.

So even without trading the specific ticker, this IPO will move not just the mechanics of valuation but the sentiment around these kinds of events. After a quiet couple of years for IPOs, the market is waking up, and I'd argue this sets an important precedent for 2026.

A company near $2 trillion going 100% or 250% after listing? The law of large numbers makes that hard. My 'don't believe me' guess is that if SpaceX moved 20–30%, that would be a banger IPO.

The real risk: when the private-equity holders cash out

The risk I think is most underpriced is different. SpaceX has been in the private equity space for a very long time.

Private equity and private credit ballooned to a $3–4 trillion monster after the 2008 crisis, when bank lending tightened. It genuinely helped carry us through the crisis and COVID. The problem: if those holders have stayed in long enough, they're heavily incentivized to take their cut 60, 75, or 90 days after the IPO and dump supply into public markets. They typically walk away with 10–20x their money.

Who's left holding? The retail crowd still frothing at the SpaceX IPO. Historically, retail is rarely the smartest trader in the room — even if 'buy the dip' has been rewarded these past few years.

Why I'm still a permanent bull anyway

Don't get me wrong — I don't think this is the bubble everyone says. The biggest reason is earnings. Roughly 85% of the stocks we track beat earnings. It's skewed toward the top 150 names, but corporate earnings are still reasonably solid.

And there's a simple truth: unless we get permanent, persistent bad news, it's hard for the market to stay beaten down forever. A few days of pullback after a nine-week rally is, by itself, an understandable correction.

But map out 90 days and the variables pile up — midterms approaching, policy direction potentially shifting. If that overlaps with private-equity holders cashing out and selling, volatility gets bigger both ways. The picture I see isn't 'this is the top' — it's more volatility to the upside first, then a distribution pattern.

How I'd actually handle the SpaceX IPO

Here's the crux. SpaceX could become a monster like CoreWeave, or fade for a year after a glamorous debut like Snapchat. Both are on the same IPO list.

Personally, rather than bet the ticker directly, I weight the ripple effect on NASDAQ, the S&P, and overall sentiment more heavily. If I wanted a toe in, I'd risk only money I can lose — say $500 to $1,000 — chasing an early 20% move. Anything more risks being just another fool buying the top of an IPO, and I'd want to be fully aware of that going in.

FAQ

Q: If IPOs drop 55% on average after a year, why touch them at all? A: Because the early window can rip — CoreWeave +300% in three months. The play, if any, is small and early, with full awareness that the one-year base rate is brutal.

Q: Why does SpaceX matter even if I don't buy it? A: Its size means passive flows give NASDAQ and S&P holders indirect exposure. The IPO moves valuation mechanics and broad market sentiment regardless of whether you trade the ticker.

Q: What's the biggest underpriced risk? A: Private-equity holders cashing out roughly 60–90 days post-IPO, dumping supply into public markets at 10–20x their cost — often leaving retail as the bag holder.