SpaceX Stock Price Explodes - Should You Buy Now?
In a Nutshell
SpaceX surged nearly 40% post-IPO to a $2.5T market cap, driven by massive ETF buying pressure and momentum. The speaker views both SpaceX and Tesla as overvalued short-term but acknowledges Musk's achievements, including creating 4,400 millionaires in one day. He won't buy at current valuations, warns against shorting due to structural buying flows, and stresses that billionaires' wealth is mostly illiquid paper gains rather than cash.
These notes were generated by AI and may contain inaccuracies.
SpaceX stock rose from a close price of 191 to hit highs of 230 during extended hours after breaking above 200, representing a 19% move on the day followed by an additional nearly 20% gain during overnight hours. The stock is currently up approximately 10.2% to 10.7% in aftermarket trading. The speaker found the 19% daily move more impressive than the initial IPO move.
When SpaceX IPOed, the speaker stated they have no intention of shorting the stock. This is because companies creating SpaceX ETFs or inverse ETFs must first buy shares at market value before offering them, creating significant buying pressure from ETF inflows. The speaker warned about the risks of inverse ETFs, noting that double-leverage ETFs could result in 40% losses from a 20% rally, and leveraged positions could wipe out entire accounts.
SpaceX demonstrates strong momentum, hype, and buying pressure. The speaker acknowledges risk exists on both sides and notes that announcements could trigger retracements. The speaker does not support irrational valuations and believes both Tesla and SpaceX are overvalued in the short term, though they hope SpaceX grows into its market cap and valuation.
In late 2008, Elon Musk was on the verge of bankruptcy. SpaceX had three failed launches with one rocket remaining, and Tesla was days from shutting down. Musk used all money earned from previously sold companies for a final Falcon 1 launch attempt, which succeeded. This established the foundation for what is now a $4 trillion empire combining Tesla and SpaceX. SpaceX as a publicly traded company is worth nearly twice as much as Tesla.
SpaceX closed at a market cap of 2.5 trillion. Speculation suggests SpaceX could take Amazon's position at 2.5 trillion or Microsoft's position at 2.8 trillion. Depending on trading, SpaceX might become one of the top four most valuable publicly traded companies. The speaker notes that market valuations reflect what investors are willing to pay, even at a premium.
Elizabeth Warren has used Elon Musk as an example for increased taxation of the rich. The speaker agrees everyone should pay their fair share and notes Elon Musk has paid more in taxes than any human in history. However, the speaker argues that politicians mismanage funds regardless of party affiliation. Musk does not want to sell shares because doing so would reduce his net worth below the commonly cited 1.3 trillion figure.
The speaker explains that billionaires do not have liquid cash equal to their net worth. When assets appreciate, owners can borrow against them without triggering taxable events, similar to how homeowners can do cash-out refinances or HELOCs without paying taxes on borrowed amounts. The speaker notes that forcing liquidation would cause stock prices to decline significantly, meaning the full value would not be realized.
A welder at SpaceX earning $28 per hour became a millionaire. Elon Musk created 4,400 millionaires in a single day through SpaceX employee equity. Of those, 400 are now worth over 100 million. The speaker emphasizes that while criticizing individuals is appropriate, it should acknowledge their contributions to others.
The speaker states Elon Musk is not a perfect human being and makes mistakes personally that they do not endorse. However, the speaker views Musk as an example of the American dream. The speaker does not agree with SpaceX or Tesla valuations but notes that Wall Street determines valuations through its own capital and risk tolerance.
Elon Musk created the most successful IPO in history. In two trading days, SpaceX potentially became the fourth most valuable publicly traded company. Musk created electric vehicles, accessible internet for underserved countries, and reusable rockets. The speaker compares Musk to a real-life Tony Stark for these accomplishments.
The speaker is not invested in SpaceX and would not purchase at current valuations. The same applies to Tesla. The speaker states they do not need to blindly support Musk but can acknowledge his achievements. The speaker attributes much of the criticism of Musk to jealousy from people who have not created successful companies themselves.
The speaker argues that student loan debt results from individual adult decisions and that successful entrepreneurs owe nothing to those seeking to be "saved" from their own choices. Building even a small company generating $1,000 monthly profit requires significant work, especially in the current market. The speaker finds it unreasonable that others demand successful individuals give away their earnings.
The speaker often criticizes valuations of Musk's companies due to lack of recent fundamental growth at Tesla, but does not believe in attacking companies while they are performing well. The speaker notes that one person's success does not diminish others' opportunities. SpaceX is currently up nearly 11% aftermarket, and the speaker will discuss how it trades the following day, potentially trading it in a live trading session. The speaker reminds viewers that speculative investments should not involve leverage and that cashing out when uncertain is acceptable.
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