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Elon Musk’s SpaceX is ready to hit the stock market this week. According to various analysts, this could become the largest stock market debut in history, with the company expected to raise approximately $75 billion at a valuation of approximately $1.77 trillion.Elon Musk is expected to reserve an unusually large portion of the offering for individual investors, potentially more than 20 percent of the shares on sale, compared to 5-7 percent typically allocated in an IPO. Brokerages are bracing for demand that could far exceed supply as retail investors look for a chance to buy into a company that has been largely inaccessible during its two decades as a private enterprise, according to a Wall Street Journal analysis.For many of these investors, the appeal goes beyond SpaceX’s business fundamentals. It’s also a bet on Musk, whose supporters helped turn Tesla into one of the world’s most valuable companies and whose ventures continue to attract loyal followers.

Should you invest? What investors and analysts are saying

As anticipation grows ahead of the listing, investors and analysts are divided on whether SpaceX is worth buying at its expected valuation. The WSJ quoted retail investors, financial advisors and market analysts as offering wildly different views on the IPO, highlighting both enthusiasm for Elon Musk’s rocket company and concern over its lofty valuation.Some people ‘can’t wait’ to buy shares while others are more cautious and completely dismissive, saying, ‘Avoid it like the plague.’Deen Nouri, a 41-year-old fintech entrepreneur who has spent years listening to Musk’s interviews and says Tesla stock is about 85 percent of his net worth. When SpaceX begins trading, he plans to buy. “What is there to think about?” Noori said.He described himself as a believer in the entrepreneurial vision of a future driven by artificial intelligence and space exploration. “Under the leadership of Elon Musk, you have an unlimited industry,” he said.The company is expected to reserve more than 20 percent of the IPO shares for retail investors, which is much higher than the normal allotment. Even this may not be enough. Brokerage firms expect strong demand from investors who have watched SpaceX’s rise from the sidelines while private shareholders have captured most of its profits.Wall Street is already preparing for a frenzy. The Merrill Lynch office in Houston recently held an information session for clients complete with SpaceX-branded baseball caps. Meanwhile, Robinhood expects huge demand through its IPO access program. CEO Vlad Tenev said that in the past, brokerages had to convince companies to allocate shares to retail investors.“We really had to scratch and scratch and ask for grace,” Tenev said. “Almost every major IPO of the result has been on Robinhood’s platform.”However, not everyone is convinced the enthusiasm is justified. “I think most retail investors should avoid trading like the plague,” said veteran fund analyst Dave Nadig, who expects extreme volatility once stocks begin trading. “This is one of the greatest moments I’ve had getting popcorn,” he said.

Historical data shows that nearly a quarter of IPO stocks lose at least half their value within three years of listing.Tamar June, a technology executive who remembers buying Yahoo stock on its first day of trading in 1996, is among those still hoping to secure SpaceX shares. June said, “I get it – that guy’s a little weird.” “But think about the ideas they have implemented.”Others say the enthusiasm is unlike anything seen in recent years. “This is a perfect storm for extreme retail excitement and demand,” said Mike Tracy, chief market analyst and vice president of risk at Apex Fintech Solutions. “Fasten your seat belt,” he said.Jeff Judge, a financial planner in Maryland, believes much of the demand has less to do with financial metrics than Musk’s celebrity. “Most of the interest is emotional, which is the honest truth,” the judge said.That loyalty has helped Tesla build a shareholder base dominated by retail investors, and some potential buyers see the same potential in SpaceX.Even some people who believe in Musk are being cautious about the IPO. North Carolina-based sales manager Josh Hill said he expects SpaceX to dominate the space industry in the long term. “Long-term, this is no easy task,” Hill said. But when asked if he would buy shares on the first day of trading, his answer was more measured. “The price has to go down,” Hill said. “Otherwise, I’m probably not a buyer.”Amid the mix of reactions, another thing worth noting is that the financial picture is much less straightforward. SpaceX was unprofitable last year with a loss of $4.9 billion, and its valuation has soared by more than 2,000 percent in recent years. At the IPO price, the company is valued at about 93.6 times annual sales, while the S&P 500 trades at about 3.3 times sales. Critics argue that many of the biggest gains have already accrued to private investors and that retail traders may be buying with extreme optimism.(Disclaimer: The recommendations and views given by experts on the stock market and other asset classes are their own. These opinions do not represent the views of The Times of India)