Space Exploration Technologies Corporation SPCX made its debut on Wall Street on June 12, 2026, at $135 per share. This was one of the largest public listings in history, making founder Elon Musk the first trillionaire in the world, per the BBC.
The stock price immediately shot up to $150 on the first day and then to $176, before closing at $160.95. Consequently, in the next week, the stock saw a spike to $225, overtaking Amazon and Microsoft in total market value, per the BBC.
But inconsistencies started showing up as at the end of its first trading month, shares of SpaceX were sold at around $145 each, which is about 18% less than the high on its first day of trading and 35% less than its peak so far, according to the BBC.
SpaceX delivered average gains of more than 20% per day to its early investors after its IPO, as mentioned by Motley Fool, quoted on Yahoo Finance. However, the stock later slumped to an intraday low of $145.20, then rebounded above $150 in early July, according to Yahoo Finance.
Despite its inclusion in the Nasdaq-100 — a move expected to drive buying from index-tracking ETFs and mutual funds — the stock still dropped, surprising investors and analysts, per Yahoo Finance.
What Can Be the Reasons Behind This Instability?
As SpaceX enters its post-honeymoon phase with public markets, its biggest rival, Blue Origin, is preparing to raise fresh capital. The rocket company backed by Amazon founder Jeff Bezos is reportedly seeking funding at a valuation of about $130 billion, marking its first public fundraising round, per a Yahoo Finance article.
For the past 25 years, Blue Origin has been almost entirely financed by Jeff Bezos. Although Blue Origin's latest fundraising (i.e., about $10 billion) is expected to be modest compared with the roughly $85 billion raised by SpaceX in its blockbuster IPO, the move underscores growing investor confidence in Blue Origin's long-term prospects and its ability to compete in the rapidly evolving space economy.
Bezos' Amazon is preparing to launch satellite Internet services through its Amazon LEO network, focusing on delivering high-capacity connectivity solutions for large enterprise customers, positioning it as a future competitor to SpaceX's Starlink.
Valuation Concerns About SpaceX
SpaceX remains among the world's most highly valued companies. Investors are increasingly questioning whether current revenues can justify a valuation approaching $2 trillion.
Although revenues are expected to grow rapidly through Starlink subscriptions, launch services and future AI infrastructure, much of that growth remains priced into the stock already, per The Motley Fool. Wall Street, too, is anticipating a range above $200, while the share price of SPCX is struggling to reach $200, per Yahoo Finance.
Gradual Lockup Expiry May Keep SpaceX Stock Volatile
Although SpaceX completed its IPO on June 12, its insider lockup schedule differs from the traditional 180-day restriction followed by most newly listed companies. Elon Musk and his associates agreed not to sell any stock for 366 days after the IPO.
After the company reports its second-quarter earnings, expected in August, eligible insiders can sell up to 20% of their holdings. They can then sell an additional 7% of their shares on each of the 70th, 90th, 105th, 120th and 135th days after the IPO, bringing the total eligible for sale to 55%.
Following the release of third-quarter earnings results, they can sell another 28%, meaning as much as 83% of non-year-locked insider shares could become available well before the conventional 180-day lockup expires.
The company also has a performance-based provision that would allow insiders to sell an extra 10% of their holdings if SpaceX's stock closes at least 30% above its IPO price for five out of any 10 consecutive trading days, per The Motley Fool, quoted in Yahoo Finance.
However, the stock has not yet reached that threshold. The staggered release of insider shares could lead to periodic waves of selling in the coming months, increasing the stock's supply and potentially creating additional pressure on its share price.
ETFs in Focus
Due to SpaceX's IPO in June, some ETFs have become the most direct ways for investors to gain exposure to the company without buying the stock outright. However, their performances have varied depending on how much SpaceX they own and the rest of their portfolios.
Baron First Principles ETF RONB has been the largest publicly available ETF holder of SpaceX, having total net assets of $328.8 million.
Before the IPO, nearly 16% of the portfolio was invested in SpaceX, per Investing.com. Currently, it has boosted its investment to 31.9%. It has an expense ratio of 1.00%. The fund trades with an average volume of 930,000 shares.
Roundhill Space & Technology ETF MARS invests across the commercial space ecosystem — launch providers, satellite operators, communications, robotics and related technologies, with assets under management worth $57.7 million.
Following the IPO of SpaceX, MARS has 21.41% of its weightage. It has an expense ratio of 0.75% and trades at an average volume of 175,000 shares a day.
VanEck Space ETF WARP offers exposure to companies involved in satellite infrastructure, launch services, aerospace and defense technology, with assets under management worth $35.7 million.
SpaceX has a weightage of 21.1% in WARP. The fund charges an expense ratio of 0.50% and trades at an average volume of 121,500 shares a day.
Bottom Line
For investors with a long investment horizon and a higher risk tolerance, the recent correction could present a better entry opportunity than the IPO frenzy. However, conservative investors may prefer to wait until after the lockup period expires and the stock establishes a more stable trading range before initiating or adding to positions.
Boost Your Portfolio with Our Top ETF Insights
Zacks' exclusive Fund Newsletter delivers actionable information, top news and analysis, as well as top-performing ETFs, straight to your inbox every week.
Don’t miss out on this valuable resource. It’s free!
Get it now >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Space Exploration Technologies Corp. (SPCX): Free Stock Analysis Report
VanEck Space ETF (WARP): ETF Research Reports
This article originally published on Zacks Investment Research (zacks.com).