$135 Billion SpaceX IPO Could See Explosive First-Day Pop

Gary Black, managing partner of The Future Fund, expects a strong first-day performance for SpaceX's upcoming IPO. He believes demand will exceed supply at the proposed $135-per-share price, citing the involvement of major Wall Street banks like Goldman Sachs, Morgan Stanley, and JPMorgan in the offering.

According to Black, these underwriters are likely to 'engineer a Day 1 pop,' creating conditions for a first-day surge once trading begins. However, he notes that strong day-one performance doesn't always translate to strong year-one returns.

Black also raised questions about the incentives surrounding major IPOs and the role investment banks play in bringing deals to market. He pointed out that JPMorgan's recent move to remove a Tesla bear from coverage could be viewed as a 'huge payday for brokers on the $SPCX IPO.'