The power of a compelling story
The SpaceX listing demonstrated the extraordinary power of narrative in financial markets. Investors were not simply buying shares in a launch-services company. They were buying a vision — one encompassing satellite communications, lunar infrastructure, artificial intelligence, defence applications, interplanetary travel and industries that have yet to be fully imagined.
There is nothing inherently wrong with this. Capital markets have always been mechanisms for funding the future. The railways of the 19th century, the aviation pioneers of the 20th century and the internet giants of the 21st all relied on investors willing to look beyond current earnings and place bets on future possibilities.
Indeed, some of the greatest investment successes in history began with visionary ideas that appeared improbable at the time. The problem arises when investors stop distinguishing between possibilities and probabilities.
A compelling story can justify optimism. It should not eliminate scepticism. History shows that investors consistently overestimate the speed of technological adoption, underestimate execution risks and assume that market leadership today guarantees market dominance tomorrow. In every era, narratives have a habit of becoming more valuable than numbers — at least temporarily. Eventually, however, fundamentals reassert themselves.
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Exchanges as guardians of trust
The SpaceX IPO also highlights the increasingly delicate role of stock exchanges. Modern exchanges compete aggressively for marquee listings. A blockbuster IPO generates trading activity, enhances prestige and attracts global attention. Every exchange wants to host the next transformational company.
Yet exchanges are more than commercial platforms. They are custodians of trust. The long-term success of any market depends not on attracting the most exciting listing of the year but on maintaining confidence that prices are formed through transparency, accountability and informed decision-making.
This creates an inherent tension. The same excitement that attracts investors can also encourage speculative behaviour. The temptation to prioritise growth over governance is never stronger than when a highly anticipated listing captures the public imagination.
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An exchange’s role is therefore neither to suppress enthusiasm nor amplify it. Its role is to ensure that enthusiasm operates within a framework of market integrity.
Rigorous disclosure
The larger the vision, the greater the need for rigorous disclosure. Traditional valuation models struggle to assess companies operating at the frontier of multiple emerging industries.
In such cases, investors require more information, not less. What assumptions underpin projected growth? How much capital will be required to realise long-term ambitions? What are the principal technological, regulatory and competitive risks? How concentrated is decision-making authority?
These questions become even more important when investors are being asked to price not only current performance but also future possibilities. The most successful exchanges of the future will be those that recognise this reality. They will resist the temptation to lower standards in pursuit of headline-grabbing listings and instead focus on ensuring that investors have access to the information necessary to make informed decisions. A healthy market welcomes ambition. It also welcomes scrutiny.
Beware the cult of inevitability
One of the recurring features of every market boom is the emergence of a belief that success is inevitable. We have seen it before. The internet would change everything. Housing prices could only rise. Electric vehicles would dominate overnight. Artificial intelligence would transform every business immediately.
In many cases, the underlying thesis proved correct. What investors got wrong was valuation, timing and execution.
Technological revolutions rarely unfold in a straight line. Markets, however, often price them as though they will. The distinction between a great company and a great investment is frequently overlooked during periods of euphoria.
A company may ultimately change the world and still disappoint investors if expectations become detached from reality.
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Some of the most painful investment losses in history have involved exceptional businesses purchased at exceptional valuations. The lesson is simple: admiration is not analysis. Investors can believe in a company’s mission while still questioning its valuation.
The limits of regulation
Of course, no regulatory framework can completely protect investors from themselves. Exchanges can strengthen disclosure standards. Regulators can enhance governance requirements. Companies can improve transparency.
But none of these measures can eliminate the most powerful force in financial markets: human psychology.
Fear of missing out (Fomo) has fuelled countless market bubbles. The prospect of extraordinary returns often convinces investors that traditional rules no longer apply. They always do.
Investor education, therefore, remains one of the most important safeguards against speculative excess. Financial literacy is not merely about understanding balance sheets and earnings reports. It is about recognising cognitive biases, questioning assumptions and resisting the temptation to confuse popularity with value.
Finding the balance
The success of the SpaceX IPO should be celebrated. It demonstrates that public markets remain capable of funding bold ideas and giving investors access to companies at the forefront of technological innovation. But the listing should also prompt reflection.
The healthiest capital markets are not those that suppress ambition. Neither are they those who become captivated by it. They are markets where dreamers and sceptics coexist. Where innovation is encouraged but scrutiny remains rigorous. Where narratives inspire but fundamentals still matter.
For stock exchanges, the challenge is not choosing between growth and governance. It is ensuring that both advance together. That is the Goldilocks effect. Not a market that fears the future. Not a market that abandons discipline in pursuit of it. But a market that remembers that while rockets may escape gravity, valuations eventually cannot.
Jeffery Tan is a lawyer who practised in international firms and multinational corporations. He is a senior accredited director of the Singapore Institute of Directors and serves on several boards, including as chairman of SGListCos.
