For investors who were able to land SpaceX IPO shares — or buy the stock as it began trading — the opening day and successive trading sessions were a thrill ride.
SpaceX stock (SPCX) opened at $150 and climbed past $160. Another near-20% gain the following Monday saw Elon Musk’s spaceflight, satellite communications, and AI company achieve a high orbit of $192.50. By its third trading day, SpaceX surpassed Amazon to become the fifth-largest publicly traded company by market value.
To the moon, right?
Yet, as any savvy investor knows, things can get ugly fast. As the saying goes, hope for the best but prepare for the worst.
Read more: Create a stock investing strategy in 3 steps
First, be aware of trading limitations
If you received shares in the IPO, be aware of the penalties for IPO flipping. Many underwriting brokers limit IPO investors from selling their shares within 15 or 30 days of opening day. Violating trade policy may result in being prohibited from participating in future offerings (such as the upcoming Anthropic and OpenAI IPOs), though there are no federal penalties.
Plan for three possible stock scenarios
Whether SpaceX’s trajectory is high, low, or just bouncing on and off the atmosphere, you will want a strategy in place.
If SpaceX stock soars
Every investor’s dream: The stock soars and you’re along for the ride. Still, there are strategies to consider:
Have a plan to take some profits along the way in a tax-efficient manner.
Ensure your SPCX doesn’t overwhelm your overall investment portfolio. Consider rebalancing your holdings regularly to maintain the SpaceX exposure you are comfortable with.
If SpaceX stock stalls
If SpaceX stock hits a price ceiling and stays there, how will you react? Ask investors who bought Tesla after its run-up to a trillion-dollar market valuation in 2021, following a massive order of Model 3 sedans from Hertz. The stock topped $407 a share. Now, four-and-a-half years later — after a lot of chart action along the way — it’s still there.
If you believe…
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