From a mixed debut to a sharp Monday rebound
SpaceX ended its first day of trading last Friday at $160.95, leaving its market capitalization at $2.1 trillion. The listing still set a record as the largest IPO in U.S. stock market history, but the closing result did not satisfy every expectation built before the debut. Research firm CFRA even assigned SPCX a “sell” rating, showing that Elon Musk’s Mars narrative received applause from some investors but did not immediately translate into broad conviction in the stock.
That tone changed during Monday’s U.S. session. According to Gate U.S. stock market data, SPCX climbed throughout the session and closed at $192.5, up 19.6%. The closing price was also the intraday high. SpaceX’s market value rose to $2.519 trillion, making it the eighth-largest company in the world by market capitalization. Data from Hyperliquid showed that SPCX had already moved above $214 in pre-market trading, and the original report judged that the stock would extend Monday’s advance after the U.S. market opened on Tuesday, with its valuation set to move past seventh-ranked Amazon.
U.S.-Iran understanding adds a macro tailwind
At the macro level, the understanding reached between the United States and Iran this week provided an important positive signal for U.S. equities, and SpaceX was listed among the beneficiaries. On June 15, Trump announced that an agreement with Iran had been reached and that the Strait of Hormuz would be open. Unlike several earlier rounds of unilateral rhetoric, this agreement was also acknowledged by Iran. On the same day, Iranian Deputy Foreign Minister Gharibabadi said the text of the U.S.-Iran memorandum of understanding had been finalized and would be formally signed in Switzerland on Friday, June 19.
The understanding was later confirmed again by Iran’s president. U.S. Vice President Vance said the agreement reached by Washington and Tehran had been signed electronically over the weekend, indicating that its terms had taken effect and reducing the room for either side to tear it up again. After the news spread, U.S. stocks opened higher overall. The Dow closed up 0.92%, the S&P 500 rose 1.65%, and the Nasdaq gained 3.07%.
Morgan Stanley argued that a long-term U.S.-Iran agreement and lower oil prices would ease inflation pressure. In its view, U.S. equities are moving away from a “single-leader” market toward a healthier broad-based advance. The bank said upside momentum in U.S. stocks is no longer confined to the technology sector and is gradually spreading into a wider range of cyclical industries.
Retail inflows and the greenshoe mechanism intensify the supply-demand imbalance
In terms of market sentiment, SpaceX remained the most favored stock among retail buyers. Vanda Track data showed that on June 16, U.S. local time, SpaceX received about $93.8 million in net retail buying in a single day. That accounted for roughly 73% of all net retail inflows into U.S. individual stocks that day. In other words, for almost every $4 of incremental retail money entering the U.S. stock market, about $3 went into SpaceX.
Against that level of demand for SPCX, SpaceX’s underwriters exercised the overallotment option in the IPO, also known as the greenshoe mechanism. They purchased an additional 83.33 million shares, bringing the total IPO issuance to 638,888,888 shares of Class A common stock. The move increased the total financing size of the offering to $85.7 billion. The original report noted that this scale exceeded the overallotment arrangements for almost every recorded technology-company IPO.
Even with the greenshoe exercised, reports said most eligible U.S. retail investors in the SpaceX IPO received only about one share. Under such an extremely tight float and severe imbalance between demand and supply, concentrated buying by retail investors was enough to push the share price sharply higher.
Options, gamma squeeze discussion and high-profile investor commentary
On June 16, influential U.S. financial media outlet zerohedge wrote that once SPCX options begin trading, the share price could rise to $400 through a gamma squeeze and surpass Nvidia. A gamma squeeze is an upward spiral caused when options market makers are forced to buy the underlying stock as prices rise. SpaceX’s public float is very low at 4.2%, while retail buying interest is high. Retail investors who have not bought SPCX shares may instead buy relatively cheaper call options. If large amounts of capital flow into call options, market makers must keep buying SPCX spot shares to hedge risk, which can push the stock higher and create a positive feedback loop. The 2021 surge in GameStop, or GME, is one of the classic examples of this effect.
Institutional coverage also contributed to the SPCX narrative. Before the U.S. market opened on June 15, Oppenheimer analyst Timothy Horan initiated coverage of SpaceX with an “outperform” rating and set a short-term price target of $190. After the U.S. market opened this Monday, SPCX closed at $192.5, broadly in line with Oppenheimer’s target price.
On June 14, Peter H. Diamandis, the entrepreneur, XPRIZE founder and early SpaceX investor, wrote that SpaceX is a “railroad in orbit.” He said the company would open the path to a multi-planetary civilization and create enormous wealth in the same way that railroads opened the American West in the 19th century. He also predicted that within the next year SpaceX would merge with Tesla and become the first $100 trillion company.
Diamandis added that over the past decade, whenever he freed up capital from other transactions, he would put that money into Bitcoin. Now, he said, whenever he has idle capital, he invests in SpaceX. Although he expects the share price to decline when locked-up shareholders are able to sell shares and some shareholders cash out, he said he is not investing in SpaceX for quarterly stock-price gains, but to support the development of an off-Earth economy. On June 16, Silicon Valley investor Brad Gerstner described SpaceX in the latest episode of the BG2 podcast as an asset that institutional investors must buy and hold, saying the company sits on both the space economy and the expansion of artificial intelligence computing power.