Hey Folks,
SpaceX (SPCX) rallied on its market debut Friday, and it's popping again on Monday!
After pricing at $135 a share and closing near $161 on Friday, the stock tacked on another 20% Monday to close at $192.50 — pushing the company's valuation past $2.5 trillion. The obvious question is what's driving it...
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Why Monday's Pop Happened
Monday's move was not blind momentum. Four specific catalysts drove it:
- The greenshoe got exercised — Underwriters exercised the full overallotment of 83.3 million additional shares at $135, lifting total proceeds to $85.7 billion. Banks only pull that lever when a stock is trading well above its offer price, and the market read it as a vote of confidence.
- A billionaire stepped in — Gina Rinehart's Hancock Prospecting confirmed a stake worth more than $1 billion, her largest investment ever outside of iron ore, calling SpaceX a rare business led by a truly exceptional person.
- Index buying is now forced — MSCI inclusion lands June 29 and Nasdaq-100 entry looms, which means passive funds become mandatory buyers against a float of only about 4%. Scarce supply colliding with mechanical demand is rocket fuel for a price.
- Musk raised the ceiling — Over the weekend, Elon Musk floated the idea that SpaceX could reach roughly $1 trillion in revenue by 2030, up from $18.7 billion in 2025, and said he would be surprised if revenue did not top that mark by 2031.
Much of that move was mechanical — the greenshoe, forced index flows, and a roughly 4% float — as much as raw enthusiasm.
The Drivers Still Ahead
Beyond the IPO mechanics, each of the three businesses carries its own catalyst into the second half of the year:
- Launch — SpaceX flew 165 Falcon 9 missions in 2025, more than the rest of the world combined. The headline event ahead is Starship Flight 13, targeted for roughly July to August; the last test splashed its upper stage down cleanly but the booster failed to relight, so a full success would be the year's biggest proof point.
- Starlink — The network reaches 10.3 million subscribers across 164 countries and threw off $4.4 billion in operating income last year at a 39% margin. After raising consumer prices $5 to $10 a month in May, the back half of the year tests whether average revenue per user finally reverses its slide.
- AI — The xAI arm was folded in only months before the listing, the foundation of an ambitious plan to eventually build AI data centers in orbit. Compute deals with Anthropic and Google are worth more than $70 billion combined, and the Google agreement begins paying out in October.
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Wall Street Can't Agree on the Price
The blockbuster debut has split analysts over whether a $2 trillion-plus valuation is justified for a company that lost nearly $5 billion last year:
- The bull case — NewStreet Research opened coverage with a $165 target, arguing the math works only on a 20-to-25-year horizon. It credits SpaceX with at least a 10-year lead in launch and expects the company to still control 90% to 95% of global launch capacity over the next four to five years — the foundation everything else depends on.
- The bear case — CFRA initiated at sell with a $115 target, nearly 29% below Friday's close, pointing to an ambitious growth strategy, a stretched valuation, and heavy capital intensity.
- The capital question — Capital spending hit $10.1 billion in the first quarter alone, up from $4.1 billion a year earlier, most of it flowing into AI. That burn is exactly what the skeptics point to — and exactly what the bulls are betting pays off.
There is also a broader caution worth remembering...
History tends not to be kind to red-hot IPOs once the initial hype fades — newly public stocks often spike on a limited float and heavy attention, then give much of it back as the excitement cools and early shares are freed to sell.
Anyways...
That's all for now!
Until Next Time,
-ZT Team
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