Retail investors are buying aggressively, institutions are raising expectations, where will SPCX go in the future?

Original | Odaily Planet Daily (@OdailyChina)

Author | Golem (@web 3_golem )

Last Friday, SpaceX's first day of trading ended with a close at $160.95, with a market capitalization of $2.1 trillion. Although SpaceX still set a record for the largest IPO in U.S. stock history, this result did not fully meet expectations compared to the market sentiment built up before the listing, and even research firm CFRA directly downgraded SPCX to a "Sell" rating. Elon Musk's "Mars story" is no longer as popular as it once was. (Read more: After SpaceX's debut: $2.1 trillion market cap, is it still worth chasing?)

In response to market concerns, SPCX surged at the opening of U.S. stocks this Monday, surprising everyone. According to Gate U.S. stock data, SPCX rose steadily after the open, closing at $192.50, up 19.6%, with the closing price also the highest of the day. Its market cap rose to $2.519 trillion, making SpaceX the 8th largest company globally by market value. However, market sentiment has not fully subsided. According to Hyperliquid data, SPCX's pre-market price had already risen above $214, so it is highly likely that after Tuesday's opening, SPCX will continue its upward trend from Monday, potentially surpassing Amazon, ranked 7th, in market cap.

U.S.-Iran reach understanding, retail enthusiasm for SpaceX remains

From a macro perspective, the agreement reached between the U.S. and Iran this week brought significant positive news to the U.S. stock market. Market expectations are that, amid geopolitical stabilization, global equities may see a new rally, with SpaceX also among the beneficiaries.

On June 15, Trump announced that an agreement with Iran had been reached, and the Strait of Hormuz would reopen. Unlike previous unilateral threats and bluster, this time the agreement was also acknowledged by Iran. Iranian Deputy Foreign Minister Gharibabadi stated on the same day that the final text of the U.S.-Iran understanding memorandum had been finalized and would be officially signed this Friday (June 19) in Switzerland.

The understanding was further confirmed by Iran's president, and U.S. Vice President Vance said that the agreement between the U.S. and Iran had been electronically signed over the weekend, indicating the terms had taken effect. The likelihood of both sides tearing up the agreement again is low. After the news broke, U.S. stocks generally rose at the open, with the Dow up 0.92%, the S&P 500 up 1.65%, and the Nasdaq up 3.07%.

Morgan Stanley believes that the long-term agreement between the U.S. and Iran will lead to falling oil prices, easing inflationary pressures. The U.S. stock market is shifting from a "narrow rally" to a healthier, broad-based rise. The upward momentum may no longer be limited to the tech sector but could gradually spread to more cyclical industries.

From market sentiment, SpaceX remains the most favored stock among retail investors. According to Vanda Track data, on June 16 (U.S. local time), retail investors net bought about $93.8 million worth of SPCX, accounting for approximately 73% of the total retail net inflow into U.S. stocks that day. This means that for every $4 of retail capital flowing into the U.S. stock market, about $3 went into SpaceX.

With such strong demand for SPCX, SpaceX underwriters exercised the over-allotment option (green shoe mechanism), purchasing an additional 83.33 million shares, bringing the total IPO shares to 638,888,888 Class A common shares. This also increased the total funds raised to $85.7 billion, a scale that surpasses nearly all previous tech IPOs' over-allotment arrangements.

However, reports indicate that most qualified retail investors in the U.S. only received about one share during the SpaceX IPO. Therefore, the extremely limited float and high demand have led to concentrated buying by retail investors, which can significantly boost the stock price.

What about SPCX's future prospects?

ZeroHedge: Options listing may push the stock price to $400

On June 16, influential financial media ZeroHedge stated that after SPCX options begin trading, the stock price could be driven up to $400 due to gamma squeeze effects, surpassing Nvidia.

Gamma squeeze is essentially a bullish spiral triggered by options market makers being forced to buy the underlying stock as they hedge their positions. SpaceX's free float is very low (4.2%), and retail enthusiasm is high. Retail investors who haven't yet bought SPCX shares might turn to buy cheaper call options. If large amounts of capital aggressively buy call options, market makers will be forced to buy SPCX shares to hedge, pushing the stock price higher in a positive feedback loop.

The 2021 GameStop (GME) surge is one of the most classic examples of this effect.

Oppenheimer: SPCX will continue to outperform the market

On June 15, before U.S. markets opened, investment bank Oppenheimer's analyst Timothy Horan issued a first-ever rating on SpaceX, giving it a "Outperform" rating with a short-term target price of $190. After the market opened on Monday, SPCX closed at $192.50, roughly in line with Oppenheimer's target.

Timothy Horan is an Oppenheimer 4.70-star analyst, mainly covering tech, communications, and telecom sectors. According to Tipranks, his forecast success rate is 58.82%. He considers SpaceX the "only fully vertically integrated AI company," controlling capital, data, large models, hardware, manufacturing, and engineering talent, and not just a traditional aerospace company.

Peter H. Diamandis: Idle funds used to buy Bitcoin now go to SpaceX

On June 14, renowned entrepreneur, XPRIZE founder, and early SpaceX investor Peter H. Diamandis posted that SpaceX is a "railway in orbit" that will usher in a multi-planetary civilization, creating enormous wealth much like railroads did in 19th-century America. He predicts that within a year, SpaceX will merge with Tesla to become the first company worth $100 trillion.

He also stated that over the past decade, whenever he released funds from other investments, he would put them into Bitcoin. But now, whenever he has idle capital, he invests in SpaceX. Although he expects the stock price to dip when locked-in shareholders sell shares and some shareholders cash out, he emphasizes that his investment in SpaceX is not for short-term stock price gains but to promote off-world economic development.

Brad Gerstner: SpaceX is a must-buy, must-hold asset for institutional investors

On June 16, prominent Silicon Valley investor Brad Gerstner described SpaceX as an asset that institutional investors must buy and hold in the latest BG2 podcast, because the company is positioned at the intersection of space economy and AI computing power expansion.

Gerstner said that skeptics focus on SpaceX's revenue last year and the investment bank’s forecast of significant revenue growth over the next three years, questioning how few companies can achieve several times growth in three to four years. But he believes that if investors trust the development trajectory of AGI, they must accept that the global computing power needed will far exceed current market expectations. When combining this view with SpaceX’s core business, it’s hard to find another company or entrepreneur offering a more direct bet on the future.