Guess what? It was not a surprise that I lost money in the SpaceX IPO. It was highly publicised that when SpaceX would IPO on 12 June 2026, it would attract a lot of demand. The small number of shares that were put up for sale were four times oversubscribed. People were tripping over each other to get their hands on the 4% of shares SpaceX sold that day.
I know this because I was following the subject with quite some interest and was also willing to play the game. Also, this is a tale as old as humans: you know what may happen, you give good advice to someone else, and then you do not follow through on your own advice.
Sit back, relax, and enjoy reading how being stupid from time to time is a feature, not a bug. The market will humble you at any time, whether you are a first-time investor, experienced, or anywhere in between.
Since I was waiting like everyone else to get in the game, I was reading the social feed on Trading 212. That platform has a Shares ISA account, and it informed me that I could buy SpaceX IPO shares. The comments were flowing like crazy in the social area of the company page on Trading 212, with people either saying they would watch from the sidelines or get involved by shorting or going long. The drama was palpable in those comment sections.
What normally happens in an over-hyped IPO, and which I did not know, is as follows:
- Loads of people will want to buy the meagre amount of shares being offered, so you will hear about IPO shares being “oversubscribed”.
- Various investing platforms will inform their users that the IPO is imminent and will list a given price.
- The listed price will not be the price at which you will be able to buy the shares.
- Some brokers and investing platforms will be able to reserve a percentage of those shares at that given price, but this was not the case with Trading 212, my platform.
- The IPO will go live during the working hours of the given exchange, and for SpaceX it was NASDAQ, which is open between 9:30 am and 4:00 pm New York time (14:30–22:00 in London).
- The IPO will usually be delayed by several hours, and dealing will be halted for a while.
- The price at which the shares will start trading will not be the given price, but will be at least 20–30% higher and will fluctuate during the first day.
- The share price may go up a bit in the first week, but chances are it will go down; the same applies in the first month.
- The share price may continue to go down for several months, especially when the lock-up period for insiders ends and they are able to sell their shares onto the market.
Note: there is a reason retail investors pushing to buy an IPO are called “bag holders”, and that is because there is almost no chance that you will make money on that IPO unless the company fulfils its promise and you hold for a long time.
My plan was simple: use £500 to buy some shares and then exit by 8 pm UK time. I suggested this to a friend, and he invested £20 and then sold for £21. He had fun earning £1.
I lost £60 because I did not follow my own rules. First, I did not check the base rates of IPOs and then used Perplexity AI to gain more information after placing an order of £500. I then found out that there is a sudden jump on the first day, followed by mostly flat or downward movement in the next week, and then further decline in the following month. The important missing information was that not many people are able to buy at the listed price.
In my case, I first panicked at the jump in price, exited, then got back in, then kept checking the charts as they moved rapidly, then bought £1000 of stock and sold it five minutes later due to the sudden fall in price. And this is how, kids, you lose £60 when your friend makes £1.
I was able to maintain composure and manage my portfolio correctly over the last year, and it went up 35%, but I could not handle the stock ticker jumping every minute or so. My psychology is not suited to trading; hence, I lost.
The stock market will always humble you when you are playing a game you have no reason to play. Also, even if you are playing a difficult game, the best way to remove panic is to practise it repeatedly under controlled conditions where losses are minimal. Nothing replaces actual experience: no matter how many books you read or investor groups you join, once you experience these situations, you learn how you react and can prepare for the next round.
Did I lose money in the SpaceX IPO? Yes, but I lost a small amount and hopefully gained some experience.
Will I buy stocks in the Anthropic and OpenAI IPOs? Yes, again in small amounts, and I will do my best to follow my own advice. Then I will stop playing the “bag holders” game and enter IPOs when you should actually go in: well before the IPO.
Have fun in the stock market and limit your losses.