Is SpaceX A Buy or Sell After It's IPO?
In a Nutshell
SpaceX IPO opened near 160, surged briefly to 176, then closed around 161, delivering only a modest gain for most retail buyers and missing the expected 200-plus hype surge. At a 2.1 trillion market cap, the company trades at a negative 225 P/E despite 19 billion revenue and heavy losses, relying on Elon Musk-driven growth expectations rather than current fundamentals. The speaker warns against leverage, stresses having a defined exit plan, and expects typical post-IPO cooling before any sustained rally.
These notes were generated by AI and may contain inaccuracies.
The speaker opens by questioning whether anyone else was not really impressed with the SpaceX IPO and states the video will cover both the good and the bad aspects, what was learned after one trading day, and a deeper dive into the company fundamentally. The speaker made $953 from trading SpaceX and closed the entire position.
On the 5-minute timeframe, SpaceX IPOed around 9:50 a.m. and instantly shot up to approximately 161. Five minutes later, the stock ranged from a high of 168 to a low of 155, described as a very volatile period. Within the first 30 minutes, there was some discrepancy with limit order fills. Fifteen minutes after the IPO, it hit highs of 169 and lows of 160, then established support before retesting resistance at 169, breaking above 170, and rallying to highs of 176.
The speaker emphasizes not focusing on the 135 IPO price for average retail traders, noting that realistic average entry prices were likely around 160 if entered within 5-10-15 minutes, but believes the true average price was probably closer to 170. From a 160 average to the day's highs represented a 10% move.
The speaker notes that a 10% move is significant in one day but expresses surprise that SpaceX did not reach 200 or 250 given the hype surrounding the IPO, especially during a period when semiconductor stocks were pushing up 5-10% daily. The stock closed at nearly 161, meaning many who entered near the open likely lost money or broke even.
From the overall highs to the overall lows, the stock offered a 10.7% downside range, which exceeded the upside range in perfect scenarios. The speaker finds it interesting that despite people taking profits from Magnificent 7 and AI companies pushing 5-10%, SpaceX showed this performance.
At the IPO price of 1.7 trillion market cap, SpaceX is now trading at a 2.1 trillion market cap. At 1.74 trillion, the combined value of Boeing, RTX, Airbus, San Fran, Honeywell, Rolls-Royce, Lockheed Martin, and GE Aerospace is still less than SpaceX's valuation.
Using Investing Pro data, SpaceX shows net income of 8.6 billion, revenue of 19 billion, but loses 8 billion. The company has a negative P/E ratio of 225 times its earnings. The speaker frames this as a "what can be" story driven by growth potential, guidance, and the dream presented by Elon Musk, referred to as the "Elon effect."
The speaker draws a parallel to Tesla, which trades at a 1 trillion market cap (previously nearly hitting 1.5-1.7 trillion) despite making only 3 billion in revenue annually with no current growth, functioning essentially as a car company. The valuation is attributed to Elon Musk, the Optimus robot, and full autonomy potential. The speaker notes that all major auto manufacturers combined would need to be added to approach Tesla's valuation.
The speaker clarifies they are not saying "don't bet against Elon," acknowledging substantial money has been made shorting Tesla appropriately, but emphasizes that shifts in sentiment—not fundamental changes—drive major moves, citing Tesla's 50% decline from nearly 500 to end 2024/start 2025.
The speaker references the quote: "Markets can stay irrational longer than you can stay solvent." They question whether space exploration and SpaceX's activities justify being the sixth most valuable publicly traded company. The speaker does not agree with the valuation fundamentally but is open to learning how others justify a negative 225 P/E ratio.
Concerns raised include capital burn rate, especially entering uncertain times, whether space exploration would remain a top priority during a recession, and how SpaceX would perform in either recession or continued bull market scenarios with already irrational valuations.
The speaker notes typical IPO price history patterns: initial hype and big pop, followed by fading hype, reality setting in, a downturn and plateau, then a potential rally. This process typically unfolds over weeks or months, not days. SpaceX will be closely monitored along with peer companies like Rocket Lab as potential proxies.
The speaker advises having skin in the game is acceptable but emphasizes two key points: do not be leveraged in case the trade turns against you, and always have a plan including both bull case and bear case scenarios. Investors should be intentional and calculated with speculative assets, knowing exact share count, entry price, and planned exit points rather than hoping to get lucky or converting day trades into swing trades.
The speaker mentions potential downgrades from institutions that were surprising and invites viewer opinions on whether the IPO was impressive or disappointing, whether expectations were met, and overall outlook on the company with reasoning.
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