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It’s possible to get in on SpaceX (SPAX.PVT) before its initial public offering (IPO), but there are risks, trade-offs, and heavy fees.
The upcoming SpaceX IPO could happen as early as this June, with a potentially massive 30% retail allocation, with underwriters of major trading platforms providing retail investors with allocations post-IPO.
But for those who want in a little sooner, it’s a little complicated.
The most direct route to SpaceX stock before an IPO is through a private secondary market. These are transactions in which existing shareholders — employees, early investors, or former contractors — sell their vested stock to new buyers. SpaceX does not issue new shares in these deals; investors buy from existing shareholders.
It’s been quite a popular option in recent months.
“SpaceX is consistently one of the most actively traded names on our platform because there’s nothing else like it in the private markets today,” Greg Martin of Rainmaker Securities, which specializes in the secondary markets, told Yahoo Finance. “You’ve got a highly defensible, massive operating scale business, a multitude of major TAM [total addressable market] expansion opportunities, with a continuously evolving story.”
Added Martin, “Demand has also almost always outpaced supply, and that’s been true even during periods where broader secondary market activity has been more muted.”