I’ve talked about the SpaceX IPO quite a bit lately.

It’s shaping up to be the biggest in modern financial history, so it deserves the extra attention.

Before excitement kicks into overdrive next week ahead of the Friday IPO, I want to leave you with one last thought.

Just because you can buy SpaceX on IPO day doesn't mean you should.

In fact, rushing into a mega-hyped IPO on opening day is one of the worst bets an investor can make.

That may sound strange.

After all, isn't the whole point of investing to buy great companies? Absolutely.

But great companies and great entry points are not the same thing.

And investors who confuse the two often end up paying a very expensive tuition bill.

What History Says About Buying IPOs

One of the biggest myths in investing is that buying a popular IPO immediately is somehow the safest move because everyone already knows it's a great company.

History tells a very different story.

When researchers examined some of the most recognizable IPOs ever brought to market — including companies like Microsoft, Amazon, Google, Meta, Alibaba, Tesla, Salesforce, Uber, Rivian, and Arm Holdings — the results were eye-opening.

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The analysis shows that all but one traded below the opening price at some point in the three months after the IPO.

On average, the biggest drawdown from the opening price during that period was about 18%.

That means you would have a chance to buy these stocks at a discount if you waited after the IPO day.

And that’s only looking at the first three months. Looking further out, the drawdowns are even more dramatic.

Within a full year after the IPO, every single one traded below the opening price within a year, averaging a maximum drawdown of about 33%.

Many of these stocks continued the drawdown cycle even two years post-IPO, as shown in the graphic below.

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Think about that for a moment.

We're not talking about failed businesses. We're talking about some of the greatest wealth-creating companies in modern history.

Amazon eventually became one of the most valuable companies on Earth. Google transformed how the world accesses information. Microsoft became the backbone of modern computing. Meta built one of the largest advertising platforms ever created.

Yet even these giants often punished investors who rushed in during the initial excitement.

The lesson is simple…

A great company does not automatically become a great investment the moment it starts trading.

The reason IPOs are different is fairly straightforward. Excitement over the stock often peaks on the IPO day.

Media coverage is everywhere, social media is exploding, and financial television can't stop talking about it.

Investors feel pressure to act immediately because they're terrified of missing out.

That emotional cocktail creates a dangerous environment.

When everybody wants to buy at once, prices disconnect from reality. Investors stop asking what a company is worth and start asking how quickly they can get exposure.

That's pure speculation, not investing. And speculation tends to be most dangerous when it feels safest.

Ironically, the companies everyone wants to own are often the ones where patience is most valuable.

SpaceX Could Be Even More Extreme

Maybe it doesn’t need to be said, but SpaceX isn't just any old IPO. It's the most anticipated public offering in decades — maybe ever.

Millions of investors have been waiting for years to buy shares.

And many of them are young investors who have never experienced a true mega-IPO cycle before.

They've heard stories about buying Google, Amazon, or Tesla. Now they believe SpaceX might be their chance.

Maybe it will be. But there's a difference between owning SpaceX and buying on day one.

The company's unusual lockup structure adds another layer of complexity.

Rather than a single, large release of insider shares six months after the IPO, shares are expected to unlock gradually throughout the second half of the year.

That means additional supply could enter the market multiple times between summer and year-end.

Every unlock creates the potential for selling pressure. Every unlock creates the potential for volatility. And every unlock creates the potential for better entry prices.

That's why you shouldn't view June 12 as the finish line. It’s only the starting gun.

One of Wall Street's oldest tricks is convincing you that opportunity is scarce. But truly great opportunities tend to come around more than once.

As we saw in the table earlier, there’s usually a chance to buy shares below the IPO price within the first few months. The same will probably happen with SpaceX.

Will the stock explode higher immediately after the IPO? Maybe.

Could forced index buying create unusual demand? Absolutely.

Could the shares surge far beyond expectations? Of course.

But that's not really the question you should be asking.

The question is whether the odds favor buying immediately. And based on virtually every historical example we have, the answer appears to be no.

The Bottom Line

Imagine walking into a casino and sitting down at a blackjack table.

Before you place your bet, you notice something unusual.

The dealer already has a 12 showing. You have a 14.

Technically, the odds are in your favor, but it’s not a great hand. And you know there are plenty of other tables available.

Do you stay and play the hand anyway?

Or do you simply stand up and find a better opportunity?

Most people already know the answer. They walk away. Not because they're afraid, but because they're disciplined.

Successful investing often works the same way.

You don't have to chase every opportunity simply because everyone else is excited. It’s better to search for favorable odds instead.

SpaceX may become one of the greatest investments of the next decade.

But even if that happens, history suggests that you will be given multiple opportunities to buy shares after the IPO excitement fades.

In the data we looked at earlier, 100% of the companies surveyed traded below their opening price within the first year. So why would you want to buy on day one?

Maybe this time is different — but I seriously doubt it!

Don’t get me wrong, this isn't an argument against SpaceX. But the company isn't going anywhere.

SpaceX will still launch rockets next month. Starlink will still grow next quarter. And Elon will still be Elon.

There’s no prize for being first. But there is a reward for being patient.

And if history teaches us anything about IPOs, it's that investors who wait for better odds often end up winning the biggest.