How to get SpaceX stock — without buying the IPO

SpaceX Friday’s initial public offering is set to be the largest ever, and it’s generating a lot of buzz.

But according to financial experts, IPOs can pose dangers for the average investor.

For starters, stocks are mostly unprofitable in the first period after the IPO, experts say. And buying individual companies rather than mutual funds with a broadly diversified basket of stocks can make that volatility even more acute for unwary investors because of their concentrated positions.

But there is also good news: Investors who want to buy shares SpaceX You don’t need to buy the stock directly.

There are numerous mutual funds and exchange-traded funds that hold SpaceX positions or will do so once the company goes public. They would hold the stocks as part of a broader investment portfolio.

The same goes for other highly anticipated, blockbuster IPOs planned for this year, such as Anthropic and OpenAI, experts said.

“There will be other ways for investors to access the stock other than buying the IPO,” said Zachary Evens, passive strategies analyst at Morningstar.

At $135 per share, SpaceX would be valued at approximately $1.8 trillion, making it the seventh-largest company in the United States by market value. The IPO is set to make CEO Elon Musk the world’s first trillionaire.

The universe of mutual funds for individual investors generally falls into two categories: actively managed and passively managed.

The latter, known as index funds, are designed to track the broad performance of the stock market through a specific market index. The data show that such funds in the long run It often outperforms situations where money managers are actively selecting stocks.

For example, Russell US indexes can add mega-cap companies like SpaceX to their indexes After five days of tradingsaid Evens.

The same timeline applies to indices provided by FTSE, CRSP and MSCI. based on To Vanguard Group.

Here’s what this means for investors: Those who hold shares in index mutual funds like the Russell 1000 or CRSP U.S. Total Stock Market Index or ETFs that track those indexes will own a piece of SpaceX after that five-day period, Evens said. Morningstar owns CRSP Market Indices.

An example of such funds is the iShares Russell 1000 ETF (smart board) and Vanguard Total Stock Market ETF (VTI), Evens said.

“The inclusion of new entrants after the end of the fifth trading day, rather than immediately entering the list, will help immediately smooth out post-IPO share price fluctuations.” based on To an article by the London Stock Exchange Group, owner of the FTSE and Russell indices.

Other index providers have adopted a slightly longer timeline.

For example, MSCI has a 10-day timeline.

Nasdaq adds a stock to the Nasdaq 100 index 15 trading days after the IPO If it is among the top 40 stocks like SpaceX; otherwise the timeline extends to approximately three months.

Some index providers, including Nasdaq and FTSE Russell, have relaxed their inclusion policies this year to “accelerate” the adoption of mega IPOs into their indexes.

“Index methodologies vary, but historically most have required new listings to be ‘seasoned’ for several months following their entry into the public market.” based on To Charles Schwab. “This period gives stocks time to demonstrate their investability before being added to the index.”

Speeding up the timeline helps the index more closely represent the U.S. stock market as a whole and minimizes deviation from market performance. based on To LSEG.

Sen. Elizabeth Warren, D-Mass., issued a letter to index providers on Thursday questioning these acceleration policies.

“This wave of changes by your firms raises significant investor protection concerns, especially amid reports that SpaceX is lobbying for ‘faster entry into your indices,’” Warren wrote. “For millions of Americans invested in index funds, the changes could lead to automatic purchases of billions of dollars of SpaceX stock without any say in the matter.”

Retirement savers are among the investors who may gain access to SpaceX through index funds, depending on the specific funds that employers make available in their 401(k) plans.

For example, about 86% of 401(k) plans had a U.S. stock fund index in 2025, according to the Plan Sponsor Council of America, a trade group.

Tesla’s (TSLASpecifically, it took about 10 years after the IPO to be added to the S&P 500, Evens said.

These weights may increase organically over time as early investors, founders, and employees sell additional shares in the months after the IPO. based on To Vanguard.

“Paradoxically, the more popular these [funds] “As far as investors are concerned, the likelihood that asset flows will undermine SpaceX’s weight increases, thereby potentially diminishing the very thing that is sought in the first place: its potential to contribute to performance,” said Jeffrey Ptak, managing director of Morningstar Research Services at Morningstar. wrote last week.

Of course, investors with active funds with large SpaceX positions are more vulnerable to big swings in stock prices, experts say.

Active funds also tend to be more expensive than index funds; This is one reason why index funds tend to outperform their actively managed counterparts over the long term.

Evens said the “cheapest and most direct” way to buy SpaceX would be to buy the stock on the exchange after it lists on Friday.

But buying individual shares often carries greater financial risks than buying a basket of diverse securities, and those risks increase in the early days of an IPO, Ritter said.

“The most likely outcome of SpaceX’s IPO is that it jumps on day one and probably underperforms the market over the next year and the next three years,” Ritter said, citing historical precedent.

Ritter said there’s always a chance of a big gain on any stock, but the likelihood of losing money on an individual security is greater than the likelihood of making money. “It’s like gambling,” he said.

He also said that since SpaceX’s valuation is already so high, “the odds of it making a really big profit are not there in my opinion.”

Holding single stocks can also have benefits.

Investors who lose money amid volatility can sell that holding and use the loss to offset capital gains taxes on their winning investments; This strategy is called “tax loss harvesting.”

“The ability to harvest tax losses and let your winners move forward is one reason why tax-savvy investors may actually want to own individual stocks rather than funds,” Ritter said.