The excitement is building around the SpaceX (SPCX) IPO, which is set to debut on the Nasdaq Composite (^IXIC) on Friday.
But before you lose your mind trying to buy SpaceX stock on its opening day, keep in mind what happened when Mark Zuckerberg brought Facebook to public markets.
The quick insight: After its IPO on May 18, 2012, Facebook (now Meta (META)) stock fell 54% from peak to trough and finished its first year down 32%. The S&P 500 (^GSPC) was up 10% over the same period.
The main issue for Facebook was valuation, given its business model. Facebook was priced for perfection at a moment when its core advertising business model was largely unproven, and Wall Street simply got ahead of the fundamentals.
Link: https://finance.yahoo.com/markets/article/psyched-about-the-spacex-ipo-dont-forget-the-brutal-lesson-from-facebooks-ipo-133806117.html