Sixteen years ago, Tesla went public on the stock market, and today, Elon Musk is preparing to take another company public, which is already larger, more ambitious, and arguably far more controversial from a valuation standpoint.
For investors weighing whether to participate in what could become the largest IPO in history, Tesla's journey offers both inspiration and caution.
Yet while the two companies share a leader, their public-market debuts could hardly be more different.
The company was only about six years old and best known for the Roadster, a $109,000 electric sports car sold in limited numbers.
Elon Musk, who today boasts a net worth exceeding $800 billion, drew a base salary of just $33,280 a year, according to Tesla's IPO filing.
Tesla had a straightforward mission. It had hoped to prove that electric vehicles could compete with gasoline-powered cars and eventually become mainstream.
The company had sold only a few vehicles and was preparing to launch the Model S sedan, which it hoped would dramatically expand its addressable market.
Research by finance professor Jay Ritter has shown that IPOs launched at extremely high revenue multiples have historically tended to underperform the broader market in the years that follow.
With a small initial float boosted by almost every investment bank on the planet, buoyant investor appetite for AI infrastructure bids, and an unprecedented path to inclusion in the Nasdaq 100 Index just 15 trading days after the IPO, we expect SpaceX’s share price will likely survive separation and even ascent toward orbit, at least for a time," the analysts said.
Max Q, the moment of greatest atmospheric pressure on a launch vehicle, will come for SpaceX’s stock in the months following the IPO, when successive tranches of stock held by private investors and employees are slated to become available for sale into the public market," Morningstar said
As additional shares enter the market following lock-up expirations, investors could see a clearer picture of where sustainable demand for the stock lies.
We think long-term investors eager to participate in SpaceX’s future endeavors and potential success will have opportunities to do so with a greater margin of safety than the initial offering is likely to provide," the analysts added.