It started off with a bang: SpaceX IPOed on June 12 with an opening price of $150 on their first day of trade, well above the offering price of $135, and within two days, enterprising traders were ravenously bidding up 380 calls (expiring in just days) in hopes of sending the stock soaring in hopes of orchestrating a gamma squeeze.
In a note out this morning, Canaccord described the "new level of optimism" that accompanied the SpaceX IPO as follows:
SPCX dynamics indicate new level of frenzy: prior to this historic IPO, we felt AI optimism was robust and certainly at times overdone, but largely funded by rational (if not exuberant) institutions including large, well capitalized public companies and PE investors. In our view, SPCX has marked a new chapter in this saga, ushering in a greater level of retail involvement and driving the stock into the top 6 market cap companies in the world, and in its first week of trading, adding the equivalent of ~1/2 the value of META, with a market value much greater than sister company TSLA despite generating only ~20% of its revenue base. Despite the company name, revenues are skewed towards connectivity (Starlink contributing $11.39 billion), with launch services generating only $4.1 billion (AI compute was $3.2 billion in 2025).
Vanda Track was even more effusive, and in a retrospective published earlier on Monday wrote that "SpaceX's first week of trading was one for the record books. Retail investors bought a net $405mn of SPCX during its first 5 trading sessions, comfortably the strongest retail IPO debut in recent history. Retail buying was extreme during the first few sessions before moderating later in the week. The flow profile increasingly resembles a retail investor that is building long-term positions rather than chasing a short-term meme stock."
The scale of retail buying in SPCX last week becomes even more remarkable when put into context. Retail investors bought more SPCX last week than they bought across all other Mag 7 stocks combined (total activity of the last 5 days in NVDA, MSFT, AMZN, META, GOOGL and GOOG was $278mn combined). They also bought more SpaceX than the combined retail buying of SPY & QQQ over the past week ($352mn). For a stock that only started trading last week, SpaceX is already competing with the market's biggest stocks and ETFs for retail capital.
As has become the norm, while buying of the stock was off the charts, retail investors quickly congregated to various leveraged SpaceX products, which also attracted strong demand. Retail investors bought $65.8mn of the Leverage Shares 2x Long SPCX Daily ETF during its first few trading sessions (while a sizeable number, but it remains well below the type of activity normally seen during speculative retail frenzies). It still dwarfs recent thematic launches – the Roundhill Memory ETF DRAM attracted just $5.6mn during its first four trading days, and it took 22 sessions for cumulative retail buying in DRAM to exceed the amount already allocated to the leveraged SpaceX ETF.
Yet after bursting out of the gate, momentum has fizzled and hopes that the stock would gamma squeeze into orbit (on a reusable rocket, of course), quickly faded. The result: after peaking on June 16 - the day SPCX stock hit a record $225 and briefly topped Microsoft in market cap - daily retail flows have collapsed, and the retail turnover has become virtually nonexistent.
This brings us back to what Canaccord said: while the bank concluded that based on the early performance of SpaceX, "Tech can likely keep its momentum in the short term", it warned that "a new, more dangerous layer of air is now underneath these stocks."
Sure enough, with the momentum gone, and the realization that trillions of shares are about to be unlocked, the stock has slumped for 3 straight days, culminating with Monday's plunge when, with SpaceX rushing to take advantage of the bond market euphoria to sell over $20 billion in investment-grade bonds for the first time before the bond window shuts in order to refinance an existing bridge loan with much higher interest, SPCX shares plunged 16.4%, shedding a record $600 billion in market value, and following a 5% drop on Wednesday and a 3.5% slide on Thursday, the stock is now just barely above where it broke for trading at $150 two weeks ago.
Worse, the stock tagged its post-IPO opening price of $150 after hours, and should the stock open below that tomorrow, then everyone who bought in the open market (and held) will be underwater.
What is especially notable, or perhaps expected, is that the pump and dump is taking place with only 5% of SPCX float available for trading: 95% of the stock is still locked-up for trading. But that will change soon:
22V Research strategist Jeff Jacobson said that there is a 20% insider share unlock after Space's earnings announcement in early to mid-August. In addition, there is a 10% share unlock if the stock trades 30% above the IPO price, as well as 7% share unlocks set for around Aug. 21 and then again on Sept. 10.
Jacobson said insiders could potentially sell 44% of SpaceX shares by early September, increasing the current float by about 900%.
In other words, it's only going to get more difficult to lift the stock from here, and meanwhile, Michael O’Rourke, chief market strategist at JonesTrading said that “sellers are back in control,” adding that “anyone in the world who wanted to buy this has bought it already.”
In its take on today's move, Bloomberg wrote that today's drop in SpaceX "managed to bring much of the market down with it."
We don't know if that's indeed the case yet, but in this market - which has been driven almost entirely by retail euphoria and momentum chasing from the March lows - should retail indeed get cold feet, first to SpaceX, then to the Memory bubble, and finally to Semi stocks which have become the main beneficiaries of the AI trade...
... then it will be time to invert TS Eliot, as the selling whimper becomes a bang.