SpaceX IPO: Should you buy an ASX space ETF to cash in?

If you haven’t heard, the launch, sorry IPO, of SpaceX (NASDAQ: SPCX) on the American stock market is imminent. Soon, we will know how this company’s first day of trading on the public markets turned out.

The initial public offering (IPO) of SpaceX has been the talk of the investing town over the past few months. Even in Australia, investors have seemingly been keen, as we’ve documented, to get amongst the hype.

Although SpaceX is scheduled to list on the American NASDAQ exchange, Australians have been given unprecedented access to the IPO, with CommSec offering investors the chance to directly participate.

But of course, many ASX investors will not be comfortable owning SpaceX shares directly. Holding an asset outside our local stock market, and in US dollars, can be daunting. Perhaps to get ahead of this, the past few months have seen more than one new ASX exchange-traded fund (ETF) that specialises in space stocks sprout.

Space ETFs flood the ASX amid SpaceX IPO

A few weeks ago, we checked out the launch (forgive the pun) of the BetaShares Space Industry ETF (ASX: RCKT). And, just a few days ago, ETF provider Global X (no relation to SpaceX) debuted its Global X Space Tech ETF (ASX: MOON).

Both of these funds offer investors indirect access to some of the leading space companies of the world. Of course, they don’t feature SpaceX yet, as the company is just now making its stock market entrance.

But it is almost certain that SpaceX will find itself in both of these ETFs’ portfolios in the very immediate future. In fact, it does not strain credulity to posit that the IPO of SpaceX is in fact the very reason for the birth of these funds in 2026.

So, if you want to invest in SpaceX, but aren’t comfortable with buying a US stock, is one of these ETFs a good alternative?

Well, in my view, yes. If you wish to be exposed to SpaceX, as well as other leading companies in the space industry, either RCKT or MOON would fill the role nicely.

Foolish Takeaway

However, a word of caution. As we’ve previously discussed, SpaceX can arguably be described as a speculative investment. The market capitalisation it is aiming for (US$1.77 trillion) is a long way from its revenues last year of US$18.7 billion, and even further from the operating loss of UD$4.2 billion that it recorded.

Space is clearly the hype sector of the month, and many investors are pouring in their dollars in the literal hope things will go to the moon. Hype bubbles tend to pop eventually, though, and investors eventually turn to profits as an indicator of value, rather than lofty plans. If that happens, investors in a space ETF are highly exposed. As such, I would argue that investors should think twice before betting the farm on SpaceX or any of these space-themed ETFs.

The post SpaceX IPO: Should you buy an ASX space ETF to cash in? appeared first on The Motley Fool Australia.

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• The SpaceX IPO is coming. Here’s how ASX investors can benefit from the excitement
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Motley Fool contributor Sebastian Bowen has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.