SpaceX Could Be the Biggest IPO in History. Here's What Happened to the Last 5 Mega-IPOs. | The Motley Fool

At 108 times sales, SpaceX would debut at nearly four times Meta's IPO valuation, despite growing more slowly and losing $5 billion last year.

SpaceX is reportedly targeting a valuation potentially exceeding $2 trillion and a roughly $75 billion raise when it goes public later this year -- about 2.5 times the current record set by Saudi Aramco's $29.4 billion offering in 2019.

The company dominates global space launch, and its Starlink segment is generating nearly $11 billion in annual revenue. This is a real, cash-generating business with a genuine moat.

So should you invest? Let's look at what happened to the last five "mega-IPOs" that have raised $15 billion or more.

The track record isn't great. And that's putting it lightly.

The only stock to outperform the market over the long haul was Meta Platforms. And even that was down considerably at the one-year mark.

There's another issue: valuation. SpaceX would be by far the most expensive stock to make a debut on this scale. If the targeted $2 trillion-plus market cap is achieved, the company's $18.5 billion in revenue would imply a price-to-sales (P/S) ratio of 108 -- almost four times as expensive as Meta shares when they hit the market.

Consider that at the height of the AI boom in late 2023 -- a time when Nvidia was tripling its revenue year over year -- Nvidia shares topped out at a P/S around 40.

The historical record is pretty clear: Most IPOs of this scale just don't pan out for investors -- short-term and long. Considering this and the fact that the stock will trade with such an extreme multiple, I can't recommend you buy SpaceX at IPO. If the share price falls considerably after the IPO, I might consider it. But I would not jump in at the beginning.