Ali Martinez, a popular market analyst on X who is usually focused on cryptocurrencies, outlined his position with regard to the SpaceX (NASDAQ: SPCX) stock initial public offering (IPO) in the early morning of June 12.
According to the on-chain expert, the recent figures pertaining to retail attention on the IPO confirm the idea that SPCX stock will soar as soon as trading starts.
However, Martinez reflected on multiple historical large public offerings, noting that it is most likely that, after an exceptional debut, the equity will suffer a severe correction.
In terms of examples, the analyst highlighted the performance of Saudi Aramco (TADAWUL: 2222), Alibaba (NYSE: BABA), and SoftBank (TYO: 9984).
SpaceX stock could crash as much as 99% if history repeats itself
Indeed, Aramco enjoyed a successful IPO but was down more than 20% within a single quarter and only regained upward momentum after the COVID-19 crash. BABA stock first rallied some 18% but then crashed 50% in its first year before re-entering a rally that took it 400% higher by the late 2020 peak.
As for SoftBank, it initially soared more than 130% and even became Japan’s biggest company for the first time during the Dot-com boom, before the subsequent bust took it 99% lower.
The equity’s performance also only became relatively steady in the 2010s, though the firm remains below its old highs to this day.
Ultimately, Ali Martinez opined that history is more likely to repeat itself than not, before stating he will ‘happily wait for the dip rather than chase the hype,’ as the true buying opportunity might present itself only ‘after the excitement fades.’
Top analyst set to miss biggest boons and biggest controversies of the SpaceX IPO
Notably, though the analyst’s approach will all but guarantee he misses the probable rally from the fast-track inclusion in the Nasdaq-100, it will also evade the potential drawbacks of some of the most controversial aspects of the SpaceX IPO.
Specifically, the offering is widely considered unorthodox, with uncommonly short lock-up periods for insiders other than Elon Musk, an exceptionally small initial float – roughly 5% instead of the more common 15% or higher – and a retail allocation approximately three times larger than usual.
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