Historical data shows major IPOs often underperform in their first year, with average declines of 9% at six and twelve months.
SpaceX is set to debut on the Nasdaq Friday, marking the largest initial public offering on record. However, past tech IPOs highlight significant first-year risks, with stocks often facing steep drawdowns after listing.
Analysis of 30 major IPOs reveals average declines of 9% at six and twelve months. Notable examples include Lyft, down 65% in its first year, and Robinhood, which fell 74%. Facebook’s 2012 IPO, which dropped 54% from peak to trough, serves as a cautionary tale.
Truist’s chief investment officer warns that retail participation and valuation expectations could drive volatility for SpaceX, despite its projected size and market excitement.