<\/p>\n
While it seems like every retail investor on the planet is going to be fighting over SpaceX shares on initial public offering (IPO) day, I believe this is a classic wait-and-see. Further, aerospace suppliers might be a better way to profit from the SpaceX IPO craze<\/strong> than a direct investment in SpaceX itself.<\/p>\n And remember, Amazon lost more than 80% of its IPO price before it got things right.\u00a0<\/p>\n First of all, I generally do not buy IPOs <\/strong>due to the high risk. The typical pattern of the IPO, even if it gaps higher, is that it will trade back down and fill in with longer-term buyers. <\/p>\n I usually wait for the stock to be publicly traded so I can assess its quantitative characteristics such as Alpha, Beta, and standard deviation. \u00a0Then, I would check the financials and see how they rank in an eight-factor fundamental model that I\u2019ve relied on for more than 40 years.<\/p>\n In short, SpaceX will launch, but when will it hit escape velocity and what will its trajectory be?<\/strong><\/p>\n There is another item for would-be investors to examine here. The deal has 21 underwriters, including the usual suspects: Goldman Sachs, Morgan Stanley, Bank of America, and JPMorgan. <\/p>\n These firms are expected to receive extraordinary underwriting commissions as part of this deal.<\/p>\n Related: BofA raises red flag on SpaceX, OpenAI IPOs<\/strong><\/p>\n In my mind, the real question is whether Wall Street is excited about SpaceX on its merits <\/strong>or because Wall Street is going to earn extraordinary fees. And FOMO may cause investors to lose sight of this.\u00a0<\/p>\n SpaceX is often described as a \u201ctrucking business\u201d that charges companies and governments to carry satellites into orbit<\/strong>. From this business, SpaceX generates revenue from three main areas: Grok AI, Starlink internet subscriptions, and rocket launches. In the coming years, SpaceX\u2019s Starlink business is expected to continue expanding and could surpass 10 million users this year.<\/p>\n Over time, SpaceX is expected to generate more revenue from internet subscriptions than from rocket launches or Grok AI. <\/p>\n For investors, the encouraging sign is that all three areas of the business appear to be growing. But one reason to wait is to see which business grows faster. <\/strong>If it\u2019s Starlink, that\u2019s a much more predictable business with recurring revenues and predictable margins.\u00a0 If the other, there might be more variance in sales and earnings, making SpaceX a much more volatile business.<\/p>\n This is one of the main reasons I am waiting. Right now, the future of SpaceX is speculative, but in a year, it will be much clearer. <\/p>\n In the end, I would rather buy aerospace suppliers like Carpenter Technology (CRS) or Howmet Aerospace (HWM) than buy the new SpaceX IPO<\/strong>. Both are suppliers of rare metals. They are a classic pick-and-shovel play, and like the suppliers during the California Gold Rush, may earn more than the miners.<\/p>\n Related: Louis Navellier says oil price drop hides bigger opportunity<\/strong><\/p>\n #Navellier #SpaceX #buyers #wait #escape #velocity<\/p>\n","protected":false},"excerpt":{"rendered":" While it seems like every retail investor on the planet is going to be fighting over SpaceX shares on initial public offering (IPO) day, I believe this is a classic… <\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[246],"tags":[879,421,3728,1843,7026,2596],"class_list":["post-4608","post","type-post","status-publish","format-standard","hentry","category-popular","tag-buyers","tag-escape","tag-navellier","tag-spacex","tag-velocity","tag-wait"],"_links":{"self":[{"href":"https:\/\/www.fintechpulse8.com\/index.php?rest_route=\/wp\/v2\/posts\/4608","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.fintechpulse8.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.fintechpulse8.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.fintechpulse8.com\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.fintechpulse8.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=4608"}],"version-history":[{"count":0,"href":"https:\/\/www.fintechpulse8.com\/index.php?rest_route=\/wp\/v2\/posts\/4608\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.fintechpulse8.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=4608"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.fintechpulse8.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=4608"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.fintechpulse8.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=4608"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}It\u2019s better to wait on the sidelines<\/strong> with IPOs<\/h2>\n
Go for the pick-and-shovel play<\/strong><\/h2>\n