Aerospace
SpaceX Post-IPO Update: Volatility and Upcoming Inclusion In Indexes
Volatile Post-IPO Time
SpaceX just executed successfully the largest IPO in history in June 12th, making its founder, Elon Musk, the world’s first trillionaire. SpaceX made $85B in its equity raise, which is effectively the single-largest equity raise in history, at a $1.7T valuation.
This success was built on three pillars:
- The two-decade-long effort to build the best space launch company on Earth, responsible for the majority of all satellites orbiting Earth.
- A previous merger with xAI (itself previously merged with X.com) helped the company ride the popularity of AI stocks and justify a very high valuation.
- A cult-fan base Elon Musk built over making Tesla and SpaceX some of the most talked-about companies in the world.
It is the latest point: very strong enthusiasm from retail investors has buoyed the stock since its IPO, with massive oversubscription despite 30% of the offering already reserved for individual investors.
From the initial $135/share of the IPO, the stock price quickly shot up more than 30% to a peak of 225.64 on June 16th. It has since strongly fallen back down to “just” $150/share on Friday, 26th June.
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This is not surprising as the initial weeks of recently IPOed stocks are often very volatile, as markets get their footing and decide what the company is actually worth. It can be the beginning of a steady rise over the next few years, or the beginning of a price decline that could bring losses of-50 % to -90%.
So, for existing shareholders and potential new investors, the question is whether the current pullback marks the beginning of a steady stock decline or just a cooldown period after the intense speculative activity from $135 per share to $225 per share.
Post-IPO Trading Activity
In the first days after the IPO, trading activity was especially intense, likely reflecting the buying pressure of all the unsatisfied demand for shares during the IPO.
It is also likely that many traders who had put their hands on shares at a lower price took their profits when it rose past the $200/share mark, cashing in a $70+ dollar profit per share.
It should, however, be noted that many retail investors are not yet selling these shares, as many brokerage firms have rules against “flipping” stock acquired in an IPO. So the most likely sellers for now are institutional investors like hedge funds and mutual funds, and retail investors using firms without rules about flipping, like Charles Schwab. People who bought SPCX shares on the open market after trading began on June 12, 2026, can also sell whenever they want.
Since the price peak, trading volume has steadily declined, reaching “only” around 62 million shares traded on June 25th, compared to 522 million shares on June 12th and 322 million shares on June 16th.
Source: Investors.com
As such, the declining price can be interpreted as selling pressure and profit-taking rising above the demand for SpaceX’s stock during the last week.
Upcoming Passive Investing Inflows
The situation could change soon, thanks to the controversial change of rules regarding SpaceX’s integration into major indexes.
From IPO, it was known that thanks to new fast-entry rules, SpaceX should join the Nasdaq-100 after 15 trading days, and some of the FTSE Russell’s indexes in just five trading days. In contrast, Tesla was public for about 10 years before it was added to the S&P 500.
The Russell indexes will classify SpaceX stock as 90.4% growth and 9.6% value. Because of that label, automated investment funds that track the Russell 1000 or invest in growth stocks will begin buying up shares of SpaceX.
“For the first time in over 30 years, the Russell indexes will be reconstituted twice this year, June and December, instead of just once. The reshuffling will also bring big changes for small-cap stocks. Dozens of smaller firms are moving from small-cap to larger indexes.”
Meanwhile, the Nasdaq 100 is expected to add SpaceX stock after July 6.
The MSCI indexes are also adding SpaceX, with the MSCI World and the MSCI ACWI (All Country World Index) adding it on June 29th.
And non-US exchanges also contribute, as SpaceX has already been added to indices such as the FTSE All-World, FTSE World, and FTSE Global All Cap.
In recent years, passive investing has risen to over 53% of total fund assets, officially overtaking active management. So paradoxically, the rise of passive investing means that the “active” integration of a large stock in major indexes will likely create massive money flow: independent of a given investor’s opinion about Elon Musk or his company, anyone owning the major ETFs will end up owning some SpaceX stock anyway.
Not All Indexes
Not all index companies have bent the rules to quickly integrate SpaceX stock. Some larger indexes, like the S&P500, will likely not integrate SpaceX until next year, so some passive investing flows will still not go to SpaceX for now.
This could even last longer in this case, as S&P requires companies to be profitable for a year before they can be considered for inclusion in the S&P 500 (SpaceX is currently loss-making).
SpaceX is, however, still eligible for indexes like the S&P Global BMI (Broad Market Index), S&P World, Dow Jones Global, and Dow Jones US.
Post-IPO Price Is Driven By Money Flow
In the long term, stocks are priced for their fundamental strengths and weaknesses. But in the short term, money flows are the determining factor. This is doubly true for recently IPOed stocks.
For this reason, the addition to major indexes might be the determining factor for SpaceX stock prices in the coming weeks and months.
“For the first six months, we’ve always said it’s more about mechanical flows than underlying valuations. Over the next six months, we’re looking at that index-arbitrage opportunity. How many indexes are you going to get added to? What’s your weighting going to be? How much passive buying pressure does that create?”
The purchase into the ETF indexes will not be instantaneous, but will be progressively done to ultimately reflect the targeted percentage of the index.
“Historically, it takes about 60 days for ETFs to absorb a new stock. What we’ve seen is that a stock often experiences a 60-day run as those purchases occur. That’s what we’ll be watching going forward.”
This means that inclusion into major indexes like the Nasdaq-100 can create tens of billions in buying pressure.
“The Nasdaq-100 has about $5 trillion in ETFs tracking that index. Let’s be conservative and assume it gets a one per cent weighting. One per cent of $5 trillion is $50 billion worth of buying pressure that would eventually enter the market once it’s added.”
Still, another factor is that the summer is starting, with a pattern of lower volume and higher volatility.
The Future Of SPCX
The drawback from the post-IPO highs is a normal phenomenon, in large part driven by profit-taking from institutional investors happy to make a quick gain for the shares they bought at just $135.
What will matter for the price action in the coming weeks is the money flows. The quicker-than-normal addition to indexes should give SpaceX a relatively unique profile compared to other IPOs.
Overall, investors should expect SpaceX’s stock to benefit from its inclusion in indexes, but also to be traded relatively thinly until September, likely leading to brutal daily price changes on both the upside and downside.
In the long run, the fundamentals of the company will be more important than the immediate buying and selling pressures.
One key element will be the Space Internet service Starlink, currently the cash flow machine of the company, with 12 million as of June 4, 2026, or 27,700 new customers per day, as well as 1,000 corporate/business jets and over 150,000 maritime vessels. As SpaceX is going to target US customers more with a Starlink mobile service push, direct competition with Verizon (VZ ), AT&T (T ), and T-Mobile (TMUS ) will likely shape SpaceX’s future revenue growth.
The other one will be xAI, with the company competing toe-to-toe with its rivals in the AI space like OpenAI, Anthropic (both to IPO soon as well), etc.
The last will be the budding space economy that the increasingly reliable and powerful Starship launcher will enable, making possible Moon bases, AI data centers in space, and possibly solar power satellites and missions to Mars.
You can read more about SpaceX’s fundamental strength in our previous article covering its merger with xAI, its refocus on lunar missions, and the details of its IPO process.
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