While everyone was cheering the SpaceX IPO. They missed the carnage underneath. It’s the biggest IPO in history. The stock popped 19% on day one. And on its way up, it torched four other space stocks. Virgin Galactic. Rocket Lab. AST SpaceMobile. Destiny Tech100. All crushed — the same day SpaceX soared. That’s no coincidence. It’s a verdict. For years, these were the stand-ins — what you bought when you couldn’t own SpaceX. That trade just died. The scarcity premium that propped them up walked out the front door and listed on the Nasdaq. So here’s the call. Dump the stand-ins because The Street is palms out.
And SpaceX itself? There’s a trade, and there’s an investment. They are not the same bet. The trade could run. The investment, at this price, is a trap. Wait for it. Why This MattersFor years, you couldn’t buy SpaceX. So money bought the next best thing. Rocket Lab, AST SpaceMobile, and Virgin Galactic ran hard. Investors called them “the closest thing to SpaceX you can own.” Destiny Tech100 — ticker DXYZ — went further. It’s a fund that held pre-IPO SpaceX shares. It often traded above the value of what it actually owned. On a trading desk, that’s called the sympathy trade. The fuel is scarcity. You pay a premium for the nearest door to an asset you can’t own. Friday, the front door opened. Virgin Galactic fell roughly a third at one point. DXYZ was off somewhere between the high teens and 25%, depending on when you looked. Intraday numbers were still moving as this was written. The direction matters more than the exact figures. This wasn’t profit-taking. It was rotation. Here’s the dynamic. The proxies lost their reason to exist. A stand-in only earns a premium while the real thing is locked away. Once SPCX listed, that scarcity premium drained out. DXYZ was one of the only ways in — and it repriced to what it actually holds. Then the money went somewhere. The investors who owned the proxies finally had the real thing to buy. Selling Rocket Lab to fund a SPCX position is the obvious swap. Here’s the part most people miss. The dollars leaving the proxies are part of what could lift SPCX from here. That sets up the real debate. SPCX is the largest IPO ever. It’s heavily argued on both sides. The bull case: scarcity plus rotation. There’s only one public name, and money is flowing in. The bear case: a $1.77 trillion value with no public earnings history. Short sellers were already lined up. Jefferies was courting SpaceX bear trades. Pros called it a “reality check.” Both sides are live. Two things also keep the day-one pop in check. First, SPCX debuted on a good tape. Iran peace hopes. Oil under $90. A positive week for stocks. Some of the strength is the market, not the company. Second, IPO hype is running hot. First-day volume was roughly ten times that of Cerebras — this year’s second-largest IPO. That’s a lot of heat. The Belanger TakeOn the sympathy names, the call is decisive. Sell. The tailwind that carried them is gone. The rotation pressure is not. Their premium was scarcity — and that ended Friday. That’s not a reason to dump every share blind. It’s a reason to stop holding them for the SpaceX glow. The bar just changed. Each company now has to earn its price on its own business. Launch contracts. Subscribers. Revenue. Cash burn. If a stock wouldn’t hold its price on those numbers alone, the reason for its premium now trades on the Nasdaq. On SPCX, the near-term pop is the trade. The rotation out of the proxies has somewhere to go. Scarcity still favors the only public name. The move may have more room before it cools. But that’s a traders’ game — the desk’s read, not a promise. The investment is a different question. This is not a good entry price. “Up 19% on day one” is not proof the value is right. Day-one pops are mostly about allocation scarcity. They’re not the market’s verdict on a $1.77 trillion price tag. Paying roughly 20% over the offer for a company with no public earnings history is paying for hype. Hype is the most expensive thing on any exchange. For an investor, the framework favors waiting. Two things have to clear first. The hype has to fade. Flippers exit. The price finds a real level. The lockup has to do its work. SPCX uses a tiered schedule. There’s a full unlock at 180 days. The largest holders are locked the longest. When that insider supply hits the tape near the six-month mark, a better price is the patient read. What to Watch- Whether rotation keeps pressing. Heavy SPCX volume plus selling in the proxies means the swap is still running. Watch how the pre-positioned shorts cover or press — that shapes the next leg. - Where SPCX settles versus its $135 offer over the next two weeks. Flippers exit. Allocation scarcity fades. That level — not the day-one close — is the first honest read on the price. - The lockup calendar. Insiders can sell a slice after the first earnings report. Then staged tranches through about day 135. Full unlock at 180 days. Largest holders locked longest. The six-month mark is what the patient setup is built around. - SpaceX’s first earnings report as a public company. That’s when audited numbers meet a $1.77 trillion price tag. The debate gets settled with data. - Whether Rocket Lab, AST SpaceMobile, and Virgin Galactic bounce on their own news. Contracts. Launches. Revenue. Or do they keep trading as SPCX satellites? That gap shows how much sympathy premium is left. About This Journal: Every entry documents what really happens at my desk — the losses, wins, and everything between — from an ex-Wall Street trader who’s been in the markets for 22 years. Trading Alliance -- Every alert I send, every research report I write, real-time. Group Mentorship -- I’ll teach you how to trade. The real way. Josh Belanger's results are not typical and are not a guarantee of your success. Josh is an experienced investor and your results will vary depending on education, work experience, and background. Josh does not personally participate in every investment alert he provides. Due to sensitivity of financial information, we do not know or track the typical results of our students. Josh’ strategies may not always be accurate, and his investments may not always be profitable. They could result in a loss of an entire investment. We cannot guarantee that you will make money or that you will be successful if you employ his trading strategies specifically or generally. Consequently, your results may significantly vary from his. We do not give investment, tax, or other professional advice. Reference to specific securities should not be construed as a recommendation to buy, sell or hold that security. Specific securities are mentioned for informational purposes only. All investments involve risk, and the past performance of a security, industry, sector, market, financial product, investment strategy, or individual’s investment does not guarantee future results or returns. Investors are fully responsible for any investment decisions they make. Such decisions should be based solely on an evaluation of their financial circumstances, investment objectives, risk tolerance, and liquidity needs.
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