Author: BitalkNews
On June 12, SpaceX will go public with a valuation of $1.8 trillion, but only about 556 million shares will actually enter circulation, corresponding to a float market cap of approximately $75 billion, which is about 4.2% of the total valuation.
In the initial phase of listing, the free float will be extremely small, but buying demand will arrive in three consecutive waves.
The first wave is the IPO subscription on June 12. Institutions and retail investors will buy the newly issued 556 million shares at a fixed price of $135. About 70% will be allocated to institutional investors, and 30% will be reserved for retail investors—a retail allocation three times higher than in a typical large IPO. Ordinary investors can subscribe through platforms like Robinhood and Fidelity. Current subscription demand has already exceeded $250 billion, nearly 4 times oversubscribed.
The second wave is trading in the secondary market after the opening. After the IPO subscription is completed, the stock will start trading on NASDAQ. The opening price is highly likely to be above $135. Prices during this phase will be determined by market supply and demand.
The third wave is the forced buying by passive funds, which is the most noteworthy aspect. The Nasdaq 100 is one of the most important stock indices in the U.S., containing the 100 largest non-financial stocks, including Apple, Nvidia, and Microsoft. Globally, over $600 billion in funds track this index, and they are required to hold each stock according to its weight in the index.
Normally, a newly listed company must wait several months to qualify for inclusion, but NASDAQ has specifically modified its rules for SpaceX, allowing fast-track inclusion just 15 trading days after listing. It has also removed the original 10% minimum free-float requirement and introduced a new weighting rule: even though SpaceX's actual free float is only 5%, the index will calculate its weight as up to 3 times that, or 15%. Once the inclusion takes effect, hundreds of funds tracking the index will need to buy SpaceX shares within a few days. With a float of only $75 billion, the concentrated influx of buying demand in a short period can easily drive up the price. These funds do not consider valuation or make judgments; they buy when the rules dictate.
These three waves of buying demand will occur almost seamlessly within the first month after listing.
However, this supply-demand imbalance will not last forever.
SpaceX has not adopted the traditional 180-day lock-up period common in IPOs. Instead, it has designed a phased release mechanism.
To understand this mechanism, we first need to grasp the post-IPO shareholding structure: The newly issued IPO shares account for about 4.2% of the total shares. Elon Musk personally holds about 42%, while the remaining approximately 54% is held by VCs, early employees, and other internal shareholders. The newly issued portion becomes tradable upon listing. Musk's shares are fully locked for 366 days and will not move. The phased unlocking applies only to the middle 54%.
Specific timeline:
- First wave, two days after the Q2 earnings release: Locked-up shareholders can sell up to 20% of their locked shares. If the stock price stays 30% above the IPO price and meets the threshold for 5 out of 10 trading days at this point, an additional 10% will be unlocked. This means the earliest group of insiders may start selling as soon as early August.
- Second wave, on days 70, 90, 105, 120, and 135 after the IPO: 7% will be unlocked at each milestone, totaling 35% across the five milestones.
- Third wave, after the Q3 earnings release, another 28% is unlocked, with the remainder released upon the expiration of the 180-day lock-up.
Elon Musk's shares are locked for 366 days, and he does not participate in any early releases. He controls over 85% of the voting rights, and this commitment is a crucial pillar of short-term market confidence in SpaceX.
From listing until the end of the year, the market will experience a six-month transformation in supply and demand dynamics. In the first half, the free float is locked up, and buying demand is highly predictable. In the second half, shares are gradually released, and each earnings milestone becomes a test of selling pressure.
The timing design is particularly noteworthy: By the time of the Nasdaq 100 annual rebalancing in mid-December, most insider shares will have been unlocked through the earlier phases. With the free float significantly increased, NASDAQ will correspondingly raise SpaceX's index weight, prompting passive funds to purchase additional shares again. This essentially provides institutional, mandatory buying support to cushion the market several months after insiders have sold substantial amounts.
