SPCX IPO Could See Strong Day 1 Pop, Says Gary Black — But One Detail Could Change The Outcome

• Gary Black expects demand to exceed supply at the proposed $135 IPO price, citing backing from major Wall Street banks.
• He says a strong trading debut is likely, with underwriters incentivized to support a successful launch.
• Despite the optimism, Black notes that IPOs with explosive first-day gains have often delivered mixed performance over the following year.

The Future Fund managing partner, Gary Black, believes the upcoming SpaceX IPO could be primed for a strong first-day rally, citing what he sees as overwhelming demand and the involvement of some of Wall Street’s biggest banks.

Black said in a post on X that there is “no question” that the demand for SPCX shares will exceed supply at the proposed $135-per-share IPO price, given the participation of Goldman Sachs, Morgan Stanley, and JPMorgan in the offering. Black added that the IPO price itself could “still be increased” before the deal comes to market.

Why Gary Black Expects A Day 1 Pop

According to Black, the presence of major investment banks usually helps generate significant institutional demand ahead of a high-profile IPO. He said that the underwriters are likely to “engineer a Day 1 pop,” creating conditions for a first-day surge once trading begins.

“As we know from past IPOs, a strong day 1 pop doesn’t always translate to strong year 1 returns,” Black said, while adding that investors who can obtain IPO allocations may want to consider participating. 

Aggressive Forecasts Ahead Of The IPO

In a separate post, Black raised questions about the incentives surrounding major IPOs and the role investment banks play in bringing deals to market.

Black said JPMorgan’s recent move to remove long-time Tesla bear Ryan Brinkman from Tesla coverage could be viewed through the lens of “huge payday for brokers on the $SPCX IPO.”

Black added that brokerages have begun publishing “fairly aggressive revenue and earnings forecasts for SpaceX.” According to him, such forecasts are common ahead of major IPOs, as firms seek larger allocations for clients and position themselves for what is often expected to be a strong first-day trading performance.

China, Hong Kong Investors Face IPO Restrictions

Underwriters working on SpaceX's IPO have been instructed not to accept orders from investors in Hong Kong and mainland China due to U.S. restrictions related to sensitive technology, reported Bloomberg.

Citing people familiar with the matter, Bloomberg stated that the lead banks managing the offering have directed members of the underwriting syndicate to block orders from customers in the two markets, including private banking clients, citing regulatory and compliance concerns. 

Morgan Stanley Sees Massive Growth Ahead

Morgan Stanley’s optimism around SpaceX has become increasingly evident ahead of the anticipated IPO. The bank recently projected that SpaceX's revenue could grow from $18.7 billion in 2025 to $3.4 trillion by 2040, according to The Wall Street Journal. It also forecasts adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) of $2.7 trillion by 2040.

Those projections come despite SpaceX reporting a net loss of $4.9 billion on $18.7 billion of revenue in 2025, according to regulatory filings.

The forecasts add context to Black's observation that brokerages have begun publishing increasingly bullish outlooks for SpaceX ahead of the IPO.

SpaceX’s IPO Terms

SpaceX disclosed details of its planned IPO in a filing with the U.S. Securities and Exchange Commission, proposing to sell 555.55 million shares at $135 apiece.

The proposed pricing would value the company at around $1.77 trillion, while leaving Elon Musk with an estimated 82.4% voting control after the listing.

Investor appetite for space-related investments has remained strong, with the Procure Space ETF (UFO) up 125% in the past 12 months, while the Tema Space Innovators ETF (NASA) has gained 36% during the same period.

On Stocktwits, retail sentiment around SPCX was in ‘extremely bullish’ territory, unchanged in the past 24 hours, while message volume was ‘extremely high.’ 

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