Leaving Franklin Templeton

Clicking OK below will take you to an independent site. Information and services provided on this independent site are not reviewed by, guaranteed by, or endorsed by Franklin Templeton or its affiliates. Please keep in mind that this independent site's terms and conditions, privacy and security policies, or other legal information may be different from those of Franklin Templeton's site. Franklin Templeton is not liable for any direct or indirect technical or system issues, consequences or damages arising from your use of this independent website.

Listen to this article

0:00 play time

SpaceX’s record-setting initial public offering (IPO) marks an important moment for both private and public markets, and for US technology companies. Limited public stock float1, future lockup2 expiration, index inclusion dynamics and a wide range of potential business outcomes will likely keep volatility elevated for the stock. We believe strong returns and a seamless IPO process should set the stage for more mega-cap IPO listings over the next year.

  • Largest IPO on record: SpaceX raised roughly US$85 billion, over three times the prior record set by Saudi Aramco’s US$25.6 billion IPO in 2019.3 The company priced at an approximately US$1.8 trillion market valuation.4
  • Strong first-day demand: Shares finished 19% above the IPO price, reflecting significant institutional and retail demand for one of the most anticipated listings in recent history.
  • Limited float should drive volatility: SpaceX listed 638 million shares (including greenshoe5), or roughly 5% of total shares outstanding. With such a small public float, trading volatility is likely to remain elevated until additional shares become available.
  • Lockup expirations will matter: Early investor, employee, executive and affiliate shares are expected to become eligible for release over the next 180 days. Liquidity should improve over time, though unlock dates may create short-term selling pressure.
  • Its business model carries a wide range of outcomes: SpaceX’s core businesses—space, connectivity, and artificial intelligence—are all on the frontier of technology. Calendar year 2025 revenue of roughly US$18 billion6 is modest relative to the valuation, so execution and the company’s ability to scale these businesses will be central to long-term returns.
  • Index inclusion could create incremental demand: Nasdaq and FTSE Russell rule changes will fast-track SpaceX’s index inclusion, with Russell eligibility after five trading days and Nasdaq after 15 trading days. S&P Index inclusion appears unlikely for at least 12 months, limiting near-term demand from S&P-tracking passive funds.
  • Investment impact: Given the combination of limited float, upcoming lockup expirations, index-related demand, and significant valuation uncertainty, we believe active managers are best positioned to evaluate entry points. More broadly, the success of the IPO will likely reopen the IPO market for other high-quality private companies, including anticipated listings from Anthropic and OpenAI.

SpaceX was chosen for this case study as it is the largest IPO in market history to date.

Follow Stephen Dover for more content like this

Stephen Dover avatar
Chief Market Strategist Head of Franklin Templeton Institute Franklin Templeton
More Articles From This Author

Endnotes:

  1. The number of company's shares that trade in public markets, a subset of a company's total outstanding shares.
  2. An equity lockup is a contractual restriction that prevents certain investors or insiders from selling or transferring their shares for a set period after an initial public offering.
  3. Source: Bloomberg. As of June 12, 2026.
  4. Source: Ibid.
  5. Greenshoe refers to an option for IPO underwriters to expand the number of shares they sell by up to 15% of the planned amount.
  6. Source: Space Exploration Technologies Corp. (SpaceX), Form S-1, U.S. SEC, filed May 20, 2026, Accession No. 0001628280-26-036936.
     

WHAT ARE THE RISKS?

All investments involve risks, including possible loss of principal. Past performance is not an indicator or a guarantee of future performance.

Investments in alternative strategiesmay be exposed to potentially significant fluctuations in value.

Diversificationdoes not guarantee a profit or protect against a loss.

Equity securitiesare subject to price fluctuation and possible loss of principal.

Indexes are unmanaged and one cannot directly invest in them. They do not include fees, expenses or sales charges.

The investment stylemay become out of favor, which may have a negative impact on performance.

Investments in privately held companiespresent certain challenges and involve incremental risks as opposed to investments in public companies, such as dealing with the lack of available information about these companies as well as their general lack of liquidity.

Large-capitalizationcompanies may fall out of favor with investors based on market and economic conditions.

Small- and mid-cap stocksinvolve greater risks and volatility than large-cap stocks.

A portfolio’s investment strategies that incorporate theidentification of thematic investment opportunities, and its performance, may be negatively impacted if the investment manager does not correctly identify such opportunities or if the theme develops in an unexpected manner. By focusing its investments ininformation technology-related industries, a portfolio carries much greater risks of adverse developments and price movements in such industries than a portfolio that invests in a wider variety of industries.

Any companies and/or case studiesreferenced herein are used solely for illustrative purposes; any investment may or may not be currently held by any portfolio advised by Franklin Templeton. The information provided is not a recommendation or individual investment advice for any particular security, strategy, or investment product and is not an indication of the trading intent of any Franklin Templeton managed portfolio.

WF: 11045658

Related insights

Important Information

This material is intended to be of general interest only and should not be construed as individual investment advice or a recommendation or solicitation to buy, sell or hold any security or to adopt any investment strategy. It does not constitute legal or tax advice. This material may not be reproduced, distributed or published without prior written permission from Franklin Templeton.

The views expressed are those of the investment manager and the comments, opinions and analyses are rendered as at publication date and may change without notice. The underlying assumptions and these views are subject to change based on market and other conditions and may differ from other portfolio managers or of the firm as a whole. The information provided in this material is not intended as a complete analysis of every material fact regarding any country, region or market. There is no assurance that any prediction, projection or forecast on the economy, stock market, bond market or the economic trends of the markets will be realized. The value of investments and the income from them can go down as well as up and you may not get back the full amount that you invested. Past performance is not necessarily indicative nor a guarantee of future performance. All investments involve risks, including possible loss of principal.

Any research and analysis contained in this material has been procured by Franklin Templeton for its own purposes and may be acted upon in that connection and, as such, is provided to you incidentally. Data from third party sources may have been used in the preparation of this material and Franklin Templeton ("FT") has not independently verified, validated or audited such data.  Although information has been obtained from sources that Franklin Templeton believes to be reliable, no guarantee can be given as to its accuracy and such information may be incomplete or condensed and may be subject to change at any time without notice. The mention of any individual securities should neither constitute nor be construed as a recommendation to purchase, hold or sell any securities, and the information provided regarding such individual securities (if any) is not a sufficient basis upon which to make an investment decision. FT accepts no liability whatsoever for any loss arising from use of this information and reliance upon the comments, opinions and analyses in the material is at the sole discretion of the user.

Franklin Templeton has environmental, social and governance (ESG) capabilities; however, not all strategies or products for a strategy consider “ESG” as part of their investment process.

Products, services and information may not be available in all jurisdictions and are offered outside the U.S. by other FT affiliates and/or their distributors as local laws and regulation permits. Please consult your own financial professional or Franklin Templeton institutional contact for further information on availability of products and services in your jurisdiction.

Issued in the U.S. by Franklin Templeton, One Franklin Parkway, San Mateo, California 94403-1906, (800) DIAL BEN/342-5236, franklintempleton.com. Investments are not FDIC insured; may lose value; and are not bank guaranteed.

You need Adobe Acrobat Reader to view and print PDF documents. Download a free version from Adobe's website.

CFA® and Chartered Financial Analyst® are trademarks owned by CFA Institute.

Sign in to view documents