SpaceX completed its initial public offering at $135 per share and on its third trading day Tuesday, the stock peaked over $225 before closing at $201.68, giving Elon Musk's rocket-and-AI company a market capitalization roughly even with Amazon at approximately $2.65 trillion. The strong performance follows accelerated index inclusion rule changes by Nasdaq and FTSE Russell that will allow SpaceX to enter major indexes within weeks rather than months or years. Analysts question whether the IPO and early trading reflect true demand for SpaceX stock or represent a honeymoon period before authentic price discovery begins, given the company sold only approximately 5% of its shares in the offering and index funds will soon execute forced purchases with no price sensitivity.
SpaceX Stock Reaches $225 Peak on Third Trading Day
SpaceX stock peaked over $225 per share on Tuesday, its third day of trading, before closing at $201.68. For much of the day, the company's market capitalization exceeded Amazon's $2.65 trillion valuation, with the two companies finishing roughly even. The company priced its IPO at $135 per share. SpaceX announced a $60 billion deal for AI coding startup Cursor on Tuesday. The company acquired xAI in February, which owns social media site X and the Grok chatbot.
Nasdaq and FTSE Russell Accelerate Index Inclusion Timeline
Nasdaq eliminated its minimum float requirement that previously required at least 10% of a company's stock to be freely traded for index inclusion. The exchange adopted a calculation system that limits the weighting of low-float stocks. Nasdaq reduced the seasoning window for vetting new issues from up to a year to 15 days, making SpaceX eligible to join the Nasdaq 100 after three trading weeks. FTSE Russell changed its inclusion eligibility from quarterly reconstitution to five trading days. FTSE Russell amended its 5% minimum free float requirement. The S&P 500 did not change its inclusion rules, which require profitability in the latest quarter and on a trailing 12-month basis.
Index Fund Purchases Create Price Discovery Gap
Funds tracking Nasdaq and FTSE Russell indexes that add SpaceX will purchase shares with no price sensitivity. Invesco's exchange-traded fund tracking the Nasdaq 100, known as the QQQ, has approximately $500 billion in assets under management. Active investors have a few-week window to buy shares before the stock enters widely owned passive index funds. The company sold approximately 5% of its shares in the IPO.
Lock-up Expiration Schedule Adds Future Supply
SpaceX uses an unconventional lock-up schedule that prevents insiders and early investors from selling stock for given periods. As lock-up periods expire in the coming months, additional supply will enter the market. As the size of SpaceX's float increases, its adjusted weighting in the Nasdaq 100 will increase according to the calculation system. Index buying will occur simultaneously with increased supply from lock-up expirations.
FAQ
What price did SpaceX stock reach on its third trading day?
SpaceX stock peaked over $225 per share on Tuesday, its third trading day, before closing at $201.68. The company priced its initial public offering at $135 per share.
How did Nasdaq change its index inclusion rules for SpaceX?
Nasdaq eliminated the minimum float requirement that previously required at least 10% of a company's stock to be freely traded and reduced the seasoning window from up to a year to 15 days, making SpaceX eligible to join the Nasdaq 100 after three trading weeks.
