SpaceX Elon musk rose by $750 billion in two months

Shares of aerospace company SpaceX were trading above $160 this week, a level at which they closed on July 6 and have not returned since. In just two months, the securities have grown by almost 50% from the low (at close) on August 5.

On Friday, the rally continued after the company acquired a critical range of radio frequencies that will allow it to provide “full coverage of mobile communications in America,” Bloomberg reported.

The company's papers unfolded after volatile trading that investors endured after the world-record IPO SpaceX held in June. The stock started at $135, in the first days of trading exceeded $200, and by the end of July fell to $108, losing $1.2 trillion in market value. However, since August, the company has won more than $ 750 billion.

“It’s a long game that has some aura of mystery, of a ‘Mask’ spirit – I think that’s where the paper trades,” said Bloomberg Intelligence analyst George Ferguson. - Many people believe in her.

What Happened After the Lockup Period

Since mid-August, stocks have been trading in a narrow range - after the lockup period expired. As a result, the number of free float shares rose from 7.5% at the time of the IPO to about 33% of the total issued shares. Wall Street feared a wave of sales after the end of the lockup period, but the stability of quotes indicates that insiders are in no hurry to exit the capital.

“This company has huge potential,” explained the behavior of insiders Director of investment Laffer Tengler, which owns shares of the company, Nancy Tengler.

Lock-up is a period of time when an investor is not entitled to sell shares purchased before or during an IPO. The rule exists in order to prevent manipulation of shares in the first months of trading.

Additional support for shares was provided by the September rebalancing of the NASDAQ 100 index: due to an increase in the volume of shares in free float, SpaceX’s weight in the index increased, which forced the funds tracking this indicator to buy more securities.

According to Morgan Stanley analyst Adam Jonas, the sale after the IPO made SpaceX one of the most profitable options for investment in the space industry and the exploration sector. The forecast price/earnings ratio (P/E) for 12 months is 111x against 540x in July this year.

Risks around the company

But investing in a company like SpaceX comes with risks. In particular, the company plans to raise $40 billion in debt to buy chips from NVIDIA. This could be one of the biggest debt deals in the construction of AI infrastructure, with long-term Treasury yields at their highest in decades.

SpaceX and Nvidia have been expanding their collaboration on computing infrastructure and artificial intelligence in recent months. In early August, SpaceX announced a partnership with Nvidia: its chips are planned to be used in orbiting computing satellites Starmind AI1.

In September, Elon Musk said that SpaceX expects in 2027 to put into orbit supercomputers Nvidia GB200 NVL72 with artificial intelligence systems.

And in the future, stocks could face even more pressure. This week, another lockup period expires, as a result of which an additional 7% of the shares will go into free circulation. In November, the company will publish its second quarterly report since the IPO, along with another major expiration of the lockup period. All of this explains why so many investors try to ignore short-term fluctuations and focus on the long-term potential of stocks.

"Investing in SpaceX is a credit card," Blue Chip Daily founder Larry Tentarelli said. The stock needs to be bought and held for two, three, four years without looking at volatility, because there is no fundamental reason to buy SpaceX right now.

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