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Space Exploration Technologies (hereinafter SpaceX, SPCX), which made a dazzling debut on the stock market with the largest initial public offering (IPO) in history, experienced extreme volatility, with its stock price going on a rollercoaster ride in just two weeks amidst the illusion of an extremely thin float immediately after listing.
This is the result of a combination of public speculative sentiment towards aerospace and artificial intelligence (AI), and Elon Musk's unique bold capital raising methods. Behind the initial stock price fluctuations of SpaceX, which has emerged as a hot potato in the capital market, lies a thorough mathematics of supply and demand that goes beyond simple corporate valuation.
▲ Photo: AI-generated image
The Illusion of Just 4.24%, 2 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, which was listed on the stock market on June 12, surged like a rocket from its IPO price to surpass $150 immediately after listing, then climbed to a high of $225, reflecting overwhelming market expectations.
The number of floating shares (Float) that SpaceX released to the market on the 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' situation 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 hitting its peak, the stock sharply reversed course, completing a 'round trip' by plummeting back to the $150 level just two weeks after listing. As of Wednesday's close, it bounced back 2.69% to $161.78, but the drop from its peak remains painful.
This was due to the peak-out of positive news, coupled with the acquisition of the software AI startup 'Cursor' for $60 billion immediately after listing, which triggered concerns about dilution of existing shareholders' equity value and provoked profit-taking sell-offs.
The $60 Billion Cursor Acquisition and Time Bomb Lockup, Timeline of the Pending Supply Flood
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 to prevent insiders and early investors from dumping shares is 180 days, SpaceX unusually adopted a 'Staggered Lockup' guideline, gradually releasing shares.
The earliest selling window opens immediately after SpaceX's first quarterly earnings announcement. Of course, this is subject to meeting specific stock price conditions, but it signals that insiders' profit-taking shares will begin to enter the market. Subsequently, selling restrictions will be progressively 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 market's circulating supply, currently around 550 million shares, could multiply several times over in a year, which is like a huge time bomb for buyers who must withstand downward pressure.
The Heavy Crown of a 110x PSR, Can Mechanical Index Inclusion Protect This Valuation?
Despite the recent sharp drop in 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 in 2025. It is essentially wearing the heaviest Price-to-Sales Ratio (PSR) crown in the history of tech companies.
This extremely overvalued structure allows no room for error in the market. While early inclusion (fast-track) into the Russell 1000 and Nasdaq 100 indices has mechanically supported the stock price with billions of dollars in passive funds, this financial power cannot erase the valuation risk itself.
If Starlink's profitability or the synergy figures from the Cursor acquisition fail to meet the market's ultra-high growth expectations by even 1% in future quarterly earnings announcements, the stock price could collapse below the $150 mark at any time, coupled with the gradually increasing supply of circulating shares.
Regardless of the belief in long-term aerospace growth, 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.*
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