New York
SpaceX was expected to be one of the hottest stocks on Wall Street this year – and it has quickly delivered on that promise, shattering trading volume records while companies race to launch new products tied to the stock.
Both the size of the IPO and the hype around it – and CEO Elon Musk – have ignited outsized interest from investors.
“I don’t recall seeing one stock dominate our customers’ activity in this manner,” Steve Sosnick, chief strategist at Interactive Brokers, said in a note.
SpaceX stock by the numbers:
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IPO: Priced at $135 a share
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June 12: Stock debuts at $150 – and closes at roughly $161
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June 16: Stock rockets to an intraday high of almost $226 before closing at $202
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June 23: Stocks hits intraday low of $147 before closing at $156
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June 26: Stock end the week at $153, down 17% on the week
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June 29: Stocks closes at $164, up 7.15% on the day
Charles Schwab, which has been offering trading services for more than 50 years, told CNN that SpaceX’s IPO day was in the top five most active trading days in Schwab’s history.
At Citadel Securities, a market maker, SpaceX’s IPO was the largest single day of net buying from retail investors in the firm’s history, outpacing the previous record by 50%, a company spokesperson said.
The stock’s initial post-IPO surge briefly lifted SpaceX’s market value above Amazon and Microsoft. At $150 a share – its debut price – SpaceX still has a larger market value than either Meta or Tesla.
Investors who bought and held are experiencing volatility. SpaceX shares soared 15% in their first week of trading before falling 17% in their second week. But it hasn’t dissuaded people from getting involved.
“Investors who chased the first-week rally got hurt,” Luke Lango, technology analyst and publisher of Innovation Investor, said in an email. “That’s the oldest IPO story in the book.”
“But the underlying business — dominant launch monopoly, profitable Starlink, xAI embedded at the core — is a decade-long story, not a two-week story,” he added.
On trading platform Interactive Brokers, SpaceX has consistently been in the top two most traded stocks every day since its IPO. The one stock that has overtaken SpaceX on Interactive Brokers: Micron Technology (MU). Micron has soared as part of the chipmaker boom.
“SpaceX has captured the imagination of a lot of traders who are normally very active in Tesla, and they’ve moved their focus toward SpaceX,” Sosnick at Interactive Brokers told CNN in a phone interview.
Jay Ritters, professor emeritus at the University of Florida, told CNN that IPOs with the most volatility tend to be highly valued growth companies.
“These companies are almost always growing rapidly, but with a lot of uncertainty about how big and how profitable they will become,” Ritter said. “SpaceX certainly fits into this category.”
SpaceX has enormous business ambitions, including data centers in space and perfecting its rocket launch capabilities. But SpaceX is burning cash on its AI businesses, and investors are making a bet that the company will be able to reach profitability in the future.
“I expect that the stock will continue to be volatile for many years,” Ritter said.
Wall Street and ETFs
SpaceX won’t be a part of the S&P 500 for at least a year, but it’s set to become a part of other popular indexes. SpaceX has officially joined the Russell 1000 and will join the Nasdaq 100 in July.
That means millions of Americans might own the stock indirectly through index funds in personal portfoilos or their retirement accounts.
And it’s not just traders piling in: Wall Street is building an entire ecosystem around the stock. Investment firms are launching new exchange-traded funds at a breakneck pace in order to give investors yet more ways to interact with the stock.
Leveraged ETFs that aim to amplify SpaceX’s performance by providing double the returns (or losses) are already hitting the market.
Options trading for SpaceX started last week, allowing investors to place more sophisticated bets on where the stock is headed next, and quickly saw a surge in interest.
SpaceX is selling rockets, satellites, internet service and AI. But many investors are also buying something else: Elon Musk.
The entrepreneur has one of the most devoted followings in corporate America, with investors willing to pay more because they believe in the person running the company as much – or more – than the business itself.
“In terms of capturing the public imagination … it’s impossible to look at SpaceX or Tesla without adding in the Elon Musk factor, and that’s really hard to quantify,” Sosnick said.
Musk is the richest man in the world – with his net worth eclipsing $1 trillion after the SpaceX IPO – and people want a piece of that track record of success.
“Most of the companies Elon runs are really not particularly valued on fundamentals, but rather on sentiment,” Howard Chan, founder and CEO at Kurv Investment Management, told CNN in a phone interview. “People expect good things from the growth that Elon can potentially bring.”
“Anything that’s related to Elon Musk – the Church of Elon Musk – there’s always this fervor to get more shares,” Chan previously told CNN on the SpaceX IPO day.
