Investors who managed to get a partial fill on the IPO of SpaceX (SPCX) stock at $135 have a paper loss. Those who chased the stock on the run-up to around $225 lost even more. SPCX stock gained over 6% in intraday trade before settling up by 3.08% to $123.54.
The daily price changes have little meaning for investors. But the bears who hold a 17.23% short float are sitting on healthy profits. The real test will come next month.
On August 6, the share restrictions unlock as many as 911.5 million shares. The flood of shares will continue in the billions after that. The share count increase does not automatically mean that the stock price falls. Insiders might not sell, demand for the stock might increase, and faith that CEO Elon Musk will meet long-term expectations might help support the stock.
The chances are low that the share price holds. Cerebras (CBRS), Klarna (KLAR), Figma (FIG), and CoreWeave (CRWV) are examples of companies whose post-IPO performance worsened. Investors may find exceptions. Decades ago, Meta Platforms (META) slumped after its IPO. After CEO Mark Zuckerberg encouraged insiders not to sell, strong quarterly results from ad revenue lifted the stock. META stock closed at $643.81, compared to its post-IPO price in the $35 range.
Investors should watch AST SpaceMobile (ASTS), Viasat (VSAT), and Rocket Lab (RKLB). Additionally, watch T-Mobile (TMUS) and Verizon Communications (VZ). They tend to rise when SPCX stock slumps and vice versa.
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