JUNE 12, 2026
A toy rocket readying for launch atop messy stacks of coins and paperwork displaying financial data. – Getty Images
Key Points
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Wall Street’s most anticipated initial public offering (IPO) of 2026, SpaceX, will make its debut today, June 12.
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Several structural dynamics of the SpaceX IPO should allow insiders to cash out, leaving retail investors to hold the bag.
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Additionally, the debut of a leveraged SpaceX ETF threatens to separate retail investors from their money.
Today is the big day! In mere hours, Elon Musk’s space and artificial intelligence (AI) goliath SpaceX (NASDAQ: SPCX) will go public, raising $75 billion and shattering Saudi Aramco’s previous record of $29.4 billion as the largest ever initial public offering (IPO) capital raise.
Combining two trillion-dollar addressable markets (space and AI) with Elon Musk’s track record (he turned Tesla into a $1.5 trillion business) clearly has retail investors excited — but I’m not among them.
The structural dynamics of this deal are engineered to allow SpaceX insiders to cash out at the expense of everyday investors. But while I thought we’d seen the worst of what’s to come with the SpaceX IPO, Wall Street has managed to one-up itself.
We’re about to witness the greatest fleecing of retail investors in history
Ahead of the SpaceX IPO, several committees amended equity index inclusion rules designed to protect investors.
For instance, Nasdaq (NASDAQ: NDAQ) Global Indexes shelved its low float requirement and slashed the time it takes for megacap companies to qualify for Nasdaq-100 inclusion from roughly three months to only 15 trading days.
The U.S. Russell Equity Index Series made similar adjustments. Instead of reviewing IPOs for inclusion quarterly, large-cap IPOs will now be eligible to join applicable indexes after just five trading sessions.
These rule changes will force index funds, mutual funds, and 401(k)s to spend tens of billions of dollars purchasing SpaceX stock after its June 12 debut.
Additionally, SpaceX is only selling approximately 555.6 million shares, or a little over 4% of its outstanding shares. Most companies going public sell 10% or more of their shares. This exceptionally low float is likely to be scooped up by funds forced to buy SpaceX stock, creating a scenario that artificially inflates the company’s share price.
Once SpaceX’s staggered unlock period comes into play in August, insiders will be able to cash out, leaving retail investors to hold the bag for an exceptionally expensive, money-losing business.
A visibly worried person looking at a rapidly rising then plunging stock chart displayed on a tablet. – Getty Images
But wait — there’s more
If you thought removing investor protections, limiting the float, and accelerating the timeline to insider sales were bad, you haven’t seen anything yet.
On June 9, ProShares, the world’s leading provider of leveraged and inverse exchange-traded funds (ETFs), announced plans to launch the leveraged ProShares Ultra SpaceX (NYSEMKT: SPCF) on (drum roll) the same day as the SpaceX IPO. As with other leveraged single-stock ETFs, ProShares Ultra SpaceX will target two times the daily returns of SpaceX, less fees.
For starters, single-stock leveraged ETFs typically sport a higher net expense ratio since they’re actively managed. For ProShares Ultra SpaceX, investors will be forking over 0.95% of their invested assets to cover fees and expenses.
Secondly, this type of levered ETF has built-in volatility decay due to its daily resetting structure. Even if SpaceX stock rises, investors can still lose money.
Courtesy/Source: The Motley Fool
