Hasn't the stock already collapsed below IPO price? Does that mean the IPO was simply overpriced? Do these people expect the stock to go down even further? Shorting is way more risky I don't see why this would be the case unless my questions turned out to be predictions.
Yes, people expect it to trade much lower, around $40 per share, still would be a huge valuation for what the company has done. Goldman Sachs analysts had an extreme range, of like $6 Billion to $5T, but the consensus $2T required 100x revenue multiple by 2030. If revenue was less than 10x by 2030 it's less than $100B company, and only $6B if it remains flat. So a lot of downsides and the upside requires a continuation of some insane magic.
I think the pullback from the initial IPO bump was expected. I think the news here is expectations that it has a lot more downside to come.
Particularly once it gets past the lockup period. If I had to guess I say a lot of folks are thinking a lot of people will sell post lock up and they’re timing their shorts around that date.
More than half of IPOs fall below their price in the first year and AFAIK it’s something like more than half underperforming market over the first five.
Basically an IPO is a bad bet for a five year position. But SPCX is especially bad.
I wouldn't say that it collapsed, it's only slightly under its IPO price, $134 vs. $135.
However it's not going up and later this month the first lockup period ends and people who got stock options are allowed to sell some of their stocks. These people don't care if the price is $134 or $135, because they go in much much lower, down to $30, from what I can tell. So starting this month there's going to be new shares available to buy, and the sellers are less critical of the price your offering.
Ingratiating himself with Trump, I imagine. It certainly paid off in the short term, since he was given a golden ticket to sack the government.
A lot of tech execs successfully brown-nosed Trump, which (unfortunately) is understandable to some extent given what was at stake and what they had to lose. But Musk is the only one who evidently enjoyed it.
Every single shorted stock, was purchased by someone else who is taking the long side of the trade. So there's as many people betting the stock will go up. This says more about volatility and volume of trading, than anything else.
Given the continued downward trend, it may be the buyers may just be disagreeing on how fast it drops, not necessarily taking a long term buy and hold position. I don't know much about option pricing, but aren't put options basically betting on the spread?
That is true for the stocks but not options. Anyone with a brokerage account can write some calls and if they get exercised it’s up to them to find the stock to buy. Most pricing models assume the liquidity is always available but that’s not necessarily the case.
true, but the other side of that trade is almost always an options market maker who will hedge their delta by trading the underlying stock. so, yes, buying a call doesn't directly represent share ownership, but it almost always results in a commensurate share purchase. not 1:1, but reflecting the delta of the option.
You're absolutely correct, and I should have been more precise. The value is always identical, but the number of participants, need not be the same for each position. Mea culpa.
Over two weeks ago, calls outnumbered puts 5 to 1 according to an article by SeekingAlpha. I am wondering if this flip is too reactive. I can't discount the "Musk premium" that keeps people enamored with his securities and cause unpredictability.
Sorta, there are no SEC requirements for lockup. It is all depends on the agreement between the IPO company and the IPO underwriters syndicate. Spotify and Slack notably skipped lockup entirely.
Goldman Sachs, Morgan Stanley, BoA, ect are the ones who set the IPO lockup terms based on their risk and exposure post IPO.
Indexes, exchanges, underwriters, ect are all private institutions who mostly can and do set their own rules.
Right now, SpaceX has provided 639 million shares to trade. People want more.
In a month, there will be 1,583 million shares to trade.
But right now, there are actually 820 million shares to trade: the 639 million provided by SpaceX, plus another 181 million provided by short sellers.
It would seem extremely dumb for a market stock to move significantly, based only on livestreams of designated test missions.
I mean wow, the Starship test flight today probably gave a lot of useful data during the countdown and fueling and preparations. I sort of had deja vu because there was recently another aborted launch (Electron? Rocket Lab?) where the engines ignited at T-00:00, and shut down immediately.
It was honestly majestic to watch that machine shut down gracefully and abort for the day. Nonetheless, it failed to influence my stock purchase decisions in the slightest.
I'm not crazy enough to try to short it, but getting out of the money put options a year or two out seems like a good idea.
If you're going to short it, you better have a buffer big enough to cover it going up to $500 for a moment somewhere before Elon is free to sell next summer. Someone will do a short squeeze, and slowly sell into it.
I feel like market cap valuations should have some way to factor in the supply/demand constraints. I know that float exists as a concept, but I think it's insane to call SpaceX a Trillion dollar company, when if it started selling significant stock tomorrow, it would probably be selling pennies on the dollar.
51 comments
[ 2.9 ms ] story [ 14.7 ms ] threadParticularly once it gets past the lockup period. If I had to guess I say a lot of folks are thinking a lot of people will sell post lock up and they’re timing their shorts around that date.
Basically an IPO is a bad bet for a five year position. But SPCX is especially bad.
However it's not going up and later this month the first lockup period ends and people who got stock options are allowed to sell some of their stocks. These people don't care if the price is $134 or $135, because they go in much much lower, down to $30, from what I can tell. So starting this month there's going to be new shares available to buy, and the sellers are less critical of the price your offering.
Same thing happening with "datacenters will destory the world because of their water use" BS
https://i.imgur.com/MF2aEM3.gif[/
https://preview.redd.it/1jwoo9q7goee1.gif?width=410&format=m...
A lot of tech execs successfully brown-nosed Trump, which (unfortunately) is understandable to some extent given what was at stake and what they had to lose. But Musk is the only one who evidently enjoyed it.
He has a malignant narcissist’s distorted grasp of time: any future he promises is always nearer than is plausible, but the past is never finalised.
Almost all lenders are institutional funds like Vanguard and Fidelity, also QQQ Trust,
As index funds they were forced to buy. Forced. They are not taking any view. No view.
So guessing they are shorting for this event
Goldman Sachs, Morgan Stanley, BoA, ect are the ones who set the IPO lockup terms based on their risk and exposure post IPO.
Indexes, exchanges, underwriters, ect are all private institutions who mostly can and do set their own rules.
Something like 20% can be sold after the q2 results are released
It is also worth noting that typical lockup contracts can be waived early at the sole discretion of the underwriters.
https://www.bloomberg.com/opinion/newsletters/2026-07-16/sho...
This was just a bag drop on retail and trying to force it into retirement funds proves it.
I mean wow, the Starship test flight today probably gave a lot of useful data during the countdown and fueling and preparations. I sort of had deja vu because there was recently another aborted launch (Electron? Rocket Lab?) where the engines ignited at T-00:00, and shut down immediately.
It was honestly majestic to watch that machine shut down gracefully and abort for the day. Nonetheless, it failed to influence my stock purchase decisions in the slightest.
SpaceX stock erases all its gains and slides below IPO price in intraday trading
https://news.ycombinator.com/item?id=48933344
SpaceX bond worth 10% less than issue price – heading for junk bond status
https://news.ycombinator.com/item?id=48920181
If you're going to short it, you better have a buffer big enough to cover it going up to $500 for a moment somewhere before Elon is free to sell next summer. Someone will do a short squeeze, and slowly sell into it.