Why I Refuse To Buy SpaceX On Day One

SpaceX (SPCX) opened for trading on Friday. The stock jammed straight toward 173 a share.

Traders in the room were already calling it the next Tesla (TSLA). They wanted to buy it and hold it forever.

I watched this exact excitement around hundreds of IPOs in the early 2000s. Tracking new listings was part of my job as an analyst back then.

The pattern almost never changes. The first day is usually the whole party.

Here is why it matters for your account this weekend. SpaceX is moving in near lockstep with the S&P 500.

Market breadth ran near 17 to 9 on the day. The whole market is leaning on one freshly listed stock.

If SpaceX falls out of the sky, the S&P 500 goes with it. That makes the first-day story more dangerous than it feels.

This piece will show you what day-one buyers almost always missa and 25 years of IPO data actually says.

Look at the last quarter century of new listings. Since 2002, 88% of IPOs hit their high water mark on day one.

That number deserves a second look. Nine out of ten new stocks never beat their first-day high.

For many of them, that high stands for years. For a few, it stands forever.

The dream sounds simple enough. You buy on day one and ride it to the next Google (GOOGL).

The math rarely cooperates. The buyers chasing that dream usually buy the top.

A second study sorted those failures by sector. Technology stood alone as the riskiest group.

Tech IPOs fail close to half the time. The other sectors rarely fail at all.

The same study named the listings that usually survive their debut:

History already ran this experiment for us. The 2001 Nasdaq is littered with tech IPOs that never came back.

Pets.com died. Webvan died. The Globe died.

The market is building that same setup again. SpaceX is the loudest debut on the board today.

I am not bearish on SpaceX. I am actually constructive on it.

I just refuse to buy it on day one. I wait for a stock to settle into a real trend.

SpaceX now has three months of chart ahead of it. I would rather miss the first pop than chase the high.

If it never comes back down, I let it go. I do not chase a runaway stock.

I lean on an old line from Frank Walsh. Buy what you know and know what you buy.

The lesson this weekend is patience. The crowd buys the headline on day one.

The data says wait for the trend to prove itself. Statistics are not on your side when you chase a first-day high.

History is not on your side either. My only goal here is to protect your capital.

Money comes and goes far too fast in this business. Being wrong on a day-one buy will cost you.

Give SpaceX its three months and let the trend tell the truth.