Beware Emotions, Concentration Risks And Slack Habits After Liquidity Events

Tom Burroughes

25 June 2026

The record-breaking IPO of SpaceX grabbed investor attention in a way that few such market events have done for years. The US company’s stock initially soared from $150 per share on launch date of June 12, making Elon Musk a trillionaire.

However, in recent days the US company – yet to make a profit – saw its share price slump, part of a wider retreat by sectors including AI. This is going to be a bumpy ride, whatever the medium-term outlook.

For those who have become rich via the IPO, there are cautionary words.

“The biggest mistake we see is allowing excitement around a company to override the investment discipline that created wealth in the first place,” Chad Tischer, head of private client consulting at Fiducient, a Wealthspire company, told Family Wealth Report in a recent interview.

“Even sophisticated investors can become emotionally attached to a compelling narrative, particularly when the company is associated with transformative technologies or a high-profile founder. We encourage clients to evaluate any IPO through the same lens they would any other investment: valuation, concentration risk, liquidity needs, portfolio fit, and long-term objectives,” Tischer said.

Investors need to be alert to the creep of poor habits, evading the need to handle concentration risks in portfolios post-IPOs, and other problems, advisors say.

At Wells Fargo’s private wealth business, the US bank has laid out a number of important considerations for those going through liquidity events: Manage concentration risk; plan early for tax implications and consider the structures available; consider differences in taxes applying in US states; avoid rapid spending rises – so-called “lifestyle creep” – and plan in a co-ordinated way.

There are age-related factors to consider.

“While there are certainly exceptions, younger investors tend to be more attracted to the growth story via public markets and long-term potential of disruptive companies,” Tischer said. “Older investors, particularly those who have already achieved financial independence, are often more focused on capital preservation, income generation, and diversification/or early exposure via private markets.

“That said, interest is increasingly driven by mindset rather than age. Many of the most enthusiastic participants are entrepreneurs and business owners who identify with the innovation and ambition behind the company regardless of their stage in life,” he said.

Prior preparation
When it comes to handling the tax impact of IPOs, Tischer’s advice is to act well before an event takes place.

“Depending on the circumstances, strategies may include charitable giving, donor-advised funds, charitable trusts, gifting programs, or transferring appreciating assets into estate planning structures before a major valuation increase,” he said.

“Following an IPO, many investors are surprised to learn that the decision is not simply whether to sell and pay taxes or continue holding the stock. There is an increasingly sophisticated toolkit available that may include exchange funds, tax-loss harvesting programs, hedging strategies, monetization techniques, and other structures designed to reduce concentration risk while improving after-tax outcomes.

“The appropriate approach depends on the investor's liquidity needs, risk tolerance, and long-term objectives. Ultimately, the goal is not simply minimizing taxes each year. The most successful families view a liquidity event as an opportunity to coordinate investment, tax, estate, and philanthropic planning in a way that maximizes after-tax wealth over multiple generations,” he said.

The fall in SpaceX’s stock price earlier this week is not an occasion for schadenfreude but reinforces the need for perspective.

"As surely as night follows day, SpaceX's reversal has arrived, bringing the shares back down to Earth and causing euphoric sentiment to sputter,” Chris Beauchamp, chief market analyst at investing and trading platform IG, said in a note earlier this week. “And just as inevitably, the losses are of such a size that they cannot be ignored by the broader market. A chill wind is blowing through stock markets around the globe as investors watch the selling.”

The largest gainers
The SpaceX IPO also shines a light on the most lucrative share floats when measured by how high a stock price rose after a company went public.

A study by online trading platform Taurex – which is based in jurisdictions including the UK, UAE and Seychelles – ranked the world's largest companies by how much their share price has grown since they first went public. It found that Tesla investors have made more money than anyone, with a $1,000 stake from 2010 now worth over $240,000.

Adobe has beaten every tech giant over 40 years, turning an $11 IPO share into nearly $245, while chipmaker Nvidia's IPO price was just $12 in 1999, the same year the dot-com bubble was inflating, yet it now trades at over $208 as AI has surged to be a dominant theme.

The Taurex research tracked the share price of 27 prominent companies from their original IPO date through June 2026, the firm said.