SpaceX’s potential mega IPO ignites investor rush into a little-known ETF
A growing wave of investor enthusiasm around a potential SpaceX initial public offering is pushing an obscure exchange-traded fund into the spotlight, underscoring how far retail investors are willing to go to gain early exposure to Elon Musk’s closely watched business empire. The renewed focus follows reports that SpaceX is targeting a public listing as early as 2026 — a deal that could rank among the largest IPOs in history.
At the center of this surge is the ERShares Private-Public Crossover ETF, traded under the ticker XOVR. Since December 8, the fund has attracted more than $470 million in inflows, accounting for over half of its total assets. The sharp rise reflects investors’ eagerness to secure even indirect exposure to SpaceX, which remains privately held but widely viewed as one of the most valuable companies in the world.
Rare exposure to a private giant fuels speculative demand
XOVR’s sudden popularity stems from one distinctive feature: its indirect stake in SpaceX through a special-purpose vehicle acquired in December 2024. According to Bloomberg Intelligence, this may make it the only US-listed ETF with exposure to Musk’s rocket company, turning it into a proxy bet on SpaceX’s future listing.
“This surge is likely linked to SpaceX stating a 2026 IPO target,” wrote Bloomberg Intelligence analysts Breanne Dougherty and Charles Bond. “Just the hint of a SpaceX IPO hit the trifecta of investor obsessions: breakthrough innovation, a privately held startup valued above $10 billion, and a revived IPO pulse.”
For many individual investors, the ETF offers something that is otherwise hard to access — a pathway into private markets typically reserved for institutional capital and wealthy investors.
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Asset growth dilutes SpaceX’s weight in the portfolio
Ironically, the very inflows driven by SpaceX enthusiasm have diluted the company’s impact within the fund. When ERShares first disclosed its SpaceX investment, it totaled more than $20 million, representing roughly 12 percent of XOVR’s assets. As fresh money poured in, that share fell to about 4 percent, making SpaceX the ETF’s fourth-largest holding behind Nvidia, Meta Platforms and Maplebear.
Joel Shulman, founder and chief investment officer of ERShares, said the firm is actively exploring ways to expand exposure to private investments but acknowledged the constraints. “Rapid growth in any fund naturally dilutes positions that are more difficult to increase quickly, such as a private asset investment,” he said, adding that valuations must comply with regulatory and accounting standards.
Valuation challenges limit upside for late investors
Analysts caution that expectations of a dramatic payoff may be misplaced. The ETF currently values its SpaceX stake at $185 per share, well below recent secondary-market transactions. According to Dave Nadig, president and director of research at ETF.com, this conservative valuation has kept the position relatively small and within concentration limits.
“If SpaceX were to go public at around $420 per share, marking the position to market could lift the ETF’s net asset value by roughly 4 percent,” Nadig said. However, he warned that investors who rushed into the fund recently may not capture that full upside. “Anyone buying after the surge risks seeing gains fade as sellers emerge post-IPO.”
He added a blunt reminder for speculative investors: “This is all a very long way of saying: there is no free lunch. The more this looks like ‘free money,’ the less likely it actually will be.”
Structural mismatch raises concerns among fund analysts
Beyond valuation, industry observers are questioning whether private assets belong in daily liquidity vehicles like ETFs. Jeffrey Ptak, managing director at Morningstar, argued that the SpaceX holding has become too small to materially affect returns while still creating confusion for investors.
“It’s incongruous to hold these kinds of instruments in a daily liquidity vehicle like an ETF,” Ptak said. “What you’re seeing right now is people diving into XOVR believing they’ll see some huge payoff from SpaceX, when the actual exposure is limited.”
As inflows continue, most new capital is likely being deployed into publicly traded stocks, further reducing the influence of SpaceX on overall performance.
SpaceX IPO hype reflects broader retail market behavior
The enthusiasm around XOVR mirrors a broader trend in markets, where retail investors increasingly seek access to private companies before they go public. The renewed IPO buzz following a prolonged slowdown has amplified interest in anything connected to potential blockbuster listings.
Bloomberg News reported earlier this month that SpaceX could target a valuation of around $1.5 trillion in a future IPO, potentially raising more than $30 billion. While neither SpaceX nor Musk has publicly confirmed the timeline, even the possibility has been enough to ignite speculative flows.
Opportunity or cautionary tale for investors?
XOVR’s sudden rise highlights both the appeal and the pitfalls of chasing exposure to private-market stars through public instruments. While the ETF offers rare access, experts warn that expectations may be running ahead of reality.
As Nadig put it, “The structure matters as much as the story.” For investors, the lesson may be less about SpaceX itself and more about understanding how much exposure they are truly getting — and at what price — when hype collides with financial mechanics.
