to leave a comment.
SpaceX Exploration Technologies (hereinafter referred to as SpaceX, SPCX), which made a spectacular debut on the stock market with the largest initial public offering (IPO) in history, showed extreme volatility immediately after its listing, with its stock price riding a rollercoaster in just two weeks amidst the illusion of an extremely thin circulating supply.
This is the result of the public's speculative sentiment towards aerospace and artificial intelligence (AI), combined with Elon Musk's unique bold capital raising methods. Behind SpaceX's initial stock price fluctuations, which emerged as a hot potato in the capital market, lies the meticulous mathematics of supply and demand, beyond simple corporate valuation.
▲ Photo: AI-generated image
The Illusion of Just 4.24%, Two Weeks of Madness Created by 550 Million 'Sold-Out' Shares
According to investment media outlet The Motley Fool on July 3 (local time), SpaceX's stock price, which listed on the stock market on June 12, reflecting the market's overwhelming expectations, immediately after listing, surged past the $150 IPO price and rocketed to a high of $225.
The number of floating shares (Float) that SpaceX released to the market on its first day of listing was only 4.24% of its total equity. Although this amounted to approximately 555.6 million shares, it was an utterly insufficient 'sold-out stock' compared to the explosive demand from global passive funds and individual investors looking to include SpaceX in their portfolios.
In a structure where demand completely overwhelmed supply, the stock price quickly overshot, but the frenzy did not last long. After peaking, the stock price reversed direction precisely, completing a 'round trip' by plummeting back to the $150 level within two weeks of listing. As of Wednesday's closing, it managed to rebound 2.69% to $161.78, but the decline from its peak remains painful.
Along with the peak-out of positive news, the fact that it acquired the software AI startup 'Cursor' for $60 billion immediately after listing and issued a large number of new shares stimulated concerns about dilution among existing shareholders and provoked profit-taking sell-offs.
The $60 Billion Cursor Acquisition and the Time Bomb Lockup, The Timeline of the Pending Supply Bomb
The Motley Fool analyzed that the 4.24% of floating shares currently traded in the market will be released in large quantities over the next year, continuously exerting downward pressure on the supply side. While the typical post-listing lockup period, set to prevent insiders and early investors from dumping shares, is 180 days, SpaceX unusually adopted a 'Staggered Lockup' guideline to gradually release shares.
The earliest selling window opens immediately after SpaceX's first quarterly earnings announcement. Although it comes with the premise that certain stock price conditions must be met, it signals that insiders' profit-taking shares will begin to be supplied to the market. Subsequently, selling restrictions will be gradually lifted, and traditional institutional lockups will expire after 180 days.
Crucially, the 366-day lockup for key insiders, including CEO Elon Musk, will be lifted precisely on June 14, 2027. This means that the current market float of approximately 550 million shares could multiply several times over in a year, which is like a huge time bomb for buyers who must endure downward pressure.
The Heavy Crown of 110x PSR, Can Mechanical Index Inclusion Protect This Valuation?
Despite the recent sharp drop in its stock price, SpaceX's market capitalization still remains in the astronomical realm of $2 trillion (approximately 2,700 trillion Korean Won). This figure is more than 110 times SpaceX's projected annual revenue of $18.6 billion for 2025. It is, in effect, wearing the heaviest Price-to-Sales Ratio (PSR) crown in the history of tech companies.
This extremely overvalued structure leaves no room for error in the market. Although billions of dollars in passive funds are mechanically supporting the stock price due to its recent fast-track inclusion in the Russell 1000 and Nasdaq 100 indices, this financial power cannot erase the valuation risk itself.
If, in future quarterly earnings announcements, Starlink's profitability or synergy figures from the Cursor acquisition fail to meet the market's ultra-high growth expectations by even 1%, coupled with the gradually increasing supply of floating shares, the stock price could collapse below the $150 mark at any time.
Separate from the belief in the long-term growth potential of aerospace, investors who must endure extreme volatility for the time being should approach with extreme caution until the fog clears and the dynamics of the circulating supply stabilize.
*Disclaimer: This article is for investment reference only, and we are not responsible for any investment losses based on it. The content should be interpreted for informational purposes only.*
Newsletter
Get key news delivered to your email every morning
to leave a comment.