What can Amazon and Facebook IPO teach us about SpaceX

Good morning and welcome to the One of a Kind Financial Show Daily. I'm Mike Milligan. It's Tuesday, June 16th. Today we're going to put SpaceX record-setting IPO into historical context. What happened when Amazon and Facebook went public and what the lesson is for you. Plus, the Fed kicks off a 2-day meeting that could reshape rate expectations through the end of the decade. Let's get to it.

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If you missed it, SpaceX had its first full Monday trading day yesterday. Friday was its initial public offering day on the market, and shares jumped another 19.6% to close at $192.46. This is up more than 42% from its IPO price of $135 in just 2 trading sessions. Then they went and made an announcement. They're acquiring a new company today. This is a company that's definitely making moves in the market. Their market cap is north of $2.5 trillion, the 6th largest publicly traded company in the world. The underwriters exercised the green shoe, an over-allocation option that lets them sell more shares when demand explodes, and SpaceX walked away with $85.7 billion raised, the largest IPO in human history. Now, here's where the history lesson matters. Because we've seen this movie before, 2 different versions of it. Version 1 was Amazon, May 17th, 1997. Amazon was priced at $18 a share. They raised $54 million and ended the first day at $23.50 with a market cap of $438 million, not billion, million. Almost nobody thought a money-losing online bookstore was going to matter. A $10,000 investment in day one on a split-adjusted basis would be worth roughly $4.9 million today, according to CBS News. This is the patient money version. And then there's version 2. Facebook, which is now Meta, launched May 18th, 2012. Facebook priced at $38, opened with NASDAQ technical glitches, popped to $45 in the first minute, And then the underwriters at Morgan Stanley had to spend the rest of the day buying shares to keep up from falling below the offering price. It closed at $38.23, just 23 cents above the IPO. The next day it dropped 11%, and by September it bottomed out to below $18, more than 50% off the IPO price. The investors who bought day one and panic sold lost half their money. The investors who held Meta hit an all-time high, closing high of $736 in February of 2025. So which one is SpaceX? Honestly, nobody knows yet. What I do know is this, retail investors bought as much SpaceX stock in its first 2 days as they bought across the entire US stock market the prior week. Robinhood alone filled 855,000 customer orders. Schwab, Fidelity, SoFi, Every eligible customer got at least one share. That kind of euphoria looked a lot more like Facebook in 2012 than Amazon in 1997. The lesson for both: position size matters, time horizon matters, and a hot IPO does not belong in the part of your portfolio that pays your mortgage. Yesterday's market action was huge, by the way. The Dow glitch closed at a fresh record, 51,671, up 468 points. Or adding 0.92% to its gains for the year. The S&P 500 added 1.65% to move to 7,554. The NASDAQ jumped 3.07% in one day to go to 26,684, its best single day since March 31st. Oil prices collapsed on the Iran framework agreement. Technology led the rally. And all the Magnificent 7 stocks were green with Meta leading the group up about 4%. Bond yields were quite flat ahead of the Fed meeting. But here is the main event. The Federal Reserve begins its 2-day meeting today. Tomorrow, Wednesday at 2:00 PM Eastern, we get the rate decision and critically the updated summary of economic projections in the dot plot. Chairman Kevin Warsh's press conference is at 2:30 PM tomorrow. This is his first meeting as Fed chair. CNBC put out their Fed survey this morning. The results are eye-opening. Here's what the pros are saying. No rate change tomorrow. The Fed funds stays at 3.62%, and the survey expects it to stay there until 2027. Fresh news this morning, hot off the press. Persistent high inflation has pushed rate cuts off the table entirely. 88% expect the Fed to drop the easing bias from a statement. That's just language that has been hinting the next move would be a cut. If they pull it out, that's a hawkish simple symbol signal. The committee has shifted hawkish by nature. As Daco at Ernst Young put it, several members of the committee have recently suggested that raising rates should remain an option if inflation continues to exceed targets. End quote. 84% of those surveyed by CNBC said AI stocks are overvalued. 69% say stocks in general are overpriced. That's actually the lowest reading in a year, but it's still a majority. Here are the 3 things to watch. This morning at 8:30, May housing starts and building permits were released. Tomorrow at 8:30 AM, May retail sales numbers. The consensus is 0.5%. This is the read on whether the consumer is still spending despite 4.2% inflation. And then tomorrow at 2:00 PM Eastern, Fed decision, dot plot, and Warsh's first press conference. If the dot plot shows zero cuts in 2026, the market will need to digest that prediction. Markets are now pricing 57% odds of a zero cut this entire year according to the capitalists. One more thing, and this is the wild card from the survey. The Iran peace deal was announced after the survey was conducted. CNBC notes that could give Walsh the leeway to reduce rates sooner than anticipated if oil keeps falling and inflation cools. So watch the body language tomorrow and see what happens. That's your Tuesday, June 16th edition of the one-of-a-kind financial show Daily SpaceX is the IPO of the century, but remember in the year 2000, the title belonged to AT&T Wireless, and you probably don't even remember that one. The market always, always finds the next shiny object. Your job is to make sure you have a written one-of-a-kind financial plan that doesn't depend on the next shiny object panning out. That's what I do at One Oak Financial. I'm Mike Milligan. My philosophy is to educate, coach, and plan. See you tomorrow with the full Fed coverage. This has been the One of a Kind Financial Show Daily with your host, Mike Milligan. I am an investment advisory representative with Advisory Alpha LLC. Ideas by Mike, doing business as One Oak Financial, is an unaffiliated entity of Advisory Alpha LLC. All comments today are sourced and noted in the comments, and this is for education purposes only. Please do not make investment decisions based Based off this, consult a licensed investment professional. To reach out to Mike, go to oneoakfinancial.com and hit contact there. That's the number oneoakfinancial.com and hit contact us.

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