Key facts
- SpaceX's stock has surged as much as 67% and fallen 35% since its June 12 trading debut.
- Shares briefly traded below their June 12 opening price of $150 and IPO price of $135.
- SpaceX is expected to be added to Russell indexes on Friday, potentially attracting $2.68 billion in passive investor inflows.
- The company is also slated for inclusion in the Nasdaq 100 index on July 6.
- Options trading shows a growing probability of the stock trading below $130 by mid-September.
SpaceX's stock experienced significant volatility, briefly trading below its initial IPO price before rebounding, drawing attention to the shifting balance of buyers and sellers. The shares have seen dramatic swings since trading began on June 12, surging as much as 67% and falling 35% from their peak. Analysts suggest these movements are more indicative of market dynamics than a fundamental change in the company's valuation prospects, especially given the information flood preceding its record $75 billion IPO and subsequent silence.
Upcoming events are expected to further influence trading. SpaceX's addition to major indexes, including the Russell indexes on Friday and the Nasdaq 100 on July 6, could drive significant inflows from passive investors, estimated at $2.68 billion for the Russell additions. The expiration of share lockups and the end of the research quiet period on July 7 will also be key factors, potentially leading to increased selling pressure.
Options market activity has become more defensive, with a growing number of investors betting on potential share declines. While initial buying was euphoric, options data now show a more balanced activity, with traders assigning a roughly 40% probability to the stock trading below $130 by mid-September. Despite a slight overall bullish bias in aggregate options, contracts expiring in July through September show nearly two puts for each open call, indicating defensive positioning.
Tuesday saw continued up-and-down trading, with shares up 5% at $162.80 after earlier falling to $147.11 amid a broader tech sector selloff. This volatility mirrors broader market trends, with Nvidia dropping below $5 trillion in market value and the Nasdaq composite index losing hundreds of billions of dollars. Bespoke Investment Group noted that if current levels hold, it could be viewed optimistically as a 'test,' but a break below could signal a sentiment shift in high-flying market segments.