Despite significant apprehensions many investors have about its massive valuation, SpaceX (NASDAQ: SPCX) has been on a meteoric rise in its early days of trading. The pesky valuation concern—coupled with an unusually small float and the potential for significant pressure on insiders to sell shares down the line—means that many investors who might otherwise be tempted to enter a position in SPCX may instead choose not to, at least not in the immediate aftermath of the largest-ever IPO.
The whole space industry may end up getting a boost because of the excitement over SpaceX, meaning that it could be an opportune time for investors to build exposure to other stocks without the same level of risk as the massive newcomer. Space exchange-traded funds (ETFs) may help to mitigate risk by accessing a broader basket of stocks within the industry. Before some of these funds rebalance, they will likely provide access to the broader industry without necessarily holding SpaceX shares directly—though investors should, of course, watch for whether and when they add a SpaceX position to their list.
