SpaceX is gearing up for a highly anticipated initial public offering (IPO) this summer, with projected valuations ranging from $1.75 trillion to over $2 trillion. As a privately held company, access to its shares has been limited, but investors are exploring alternative routes to gain exposure. Exchange-traded funds (ETFs) that invest in privately held companies are gaining traction, despite the inherent risks tied to liquidity and redemption freezes at firms like Blue Owl and Morgan Stanley.
For those eager to invest before the IPO, two ETFs stand out. The ERShares Private-Public Crossover ETF (XOVR) has a significant 28% allocation in a special-purpose vehicle (SPV) linked to SpaceX, although this comes with liquidity risks. Conversely, the Baron First Principles ETF (RONB) holds direct shares of SpaceX, providing a more straightforward investment, albeit with a smaller 8% allocation.
Investors should weigh the trade-offs between these ETFs, particularly the liquidity implications and the potential for operational risk, as they seek to capitalize on the forthcoming SpaceX IPO.
Source: fool.com