SpaceX (SPCX), will it crash if supply explodes?...Will it drop to $50 despite Nasdaq inflow tailwinds?

▲ SpaceX (SPCX), Nasdaq 100/AI generated image

SpaceX (SPCX) is anticipating passive fund inflows due to its inclusion in the Nasdaq 100, but a warning has been issued that the circulating supply could rapidly increase from the current 5% to 60% by November. Cryptocurrency analyst Lark Davis took a strong stance, stating that "a large supply of shares could pressure the price," and that he would only consider buying if the price drops to $50-$70.

Lark Davis, host of the cryptocurrency podcast "The Lark Davis Show," stated in an episode on July 6 (local time) that passive fund inflows would begin as SpaceX is included in the Nasdaq 100 and QQQ this week. However, Davis focused more on the volume of shares to be released into the market in the future than on the effects of index inclusion.

Davis explained, "While SpaceX's current circulating share ratio is about 5%, 60% of the total supply could enter the market by November 2026." He also suggested that the circulating ratio could approach 100% by mid-2027. He questioned whether high prices could be maintained amidst a massive new supply, stating, "It goes from 5% to 60% by the end of the year."

He also warned of the possibility of sharp price adjustments after an initial public offering. Davis claimed that an average IPO stock can experience a drop of 50-70% in its first year. He also presented a calculation that a 70% drop would push SpaceX's price down to around $60-$65.

Davis stated, "I would be interested if I could buy SpaceX at $50-$70." He further clarified his position that he would choose other investment opportunities even if he missed out on SpaceX at higher prices. The size of the stock supply has been presented as a key variable in investment decisions for SpaceX, as the passive fund inflows from Nasdaq 100 inclusion clash with the potential expansion of circulating supply from 5% to 60%.

[Key Article Summary]

-Lark Davis explained that passive fund inflows could begin for SpaceX due to its inclusion in the Nasdaq 100 and QQQ.

-Davis warned that SpaceX's circulating share ratio could increase from about 5% currently to 60% by November 2026.

-He mentioned the possibility of a 50-70% correction for IPO stocks and suggested $50-$70 as the target price range for buying SpaceX.

*Disclaimer: This article is for investment reference only, and we are not responsible for investment losses based on it. The content should be interpreted for informational purposes only.*