Author: BitalkNews

On June 12, SpaceX will go public with a valuation of $1.8 trillion, but only about 556 million shares will actually be put into circulation, corresponding to a market value of about $75 billion, accounting for 4.2% of the total valuation.

In the early stages of listing, the circulating shares are extremely small, but buying will come in three waves.

The first wave was the IPO subscription on June 12th. Institutional and retail investors purchased 556 million newly issued shares at a fixed price of $135. Approximately 70% were allocated to institutional investors, and 30% were reserved for retail investors, a retail allocation three times that of a typical large IPO. Ordinary investors could subscribe through platforms such as Robinhood and Fidelity. Current subscription demand has exceeded $250 billion, nearly four times the offering size.

The second wave is secondary market trading after the IPO. After the IPO subscription is completed, the stock will be listed and traded on Nasdaq, with an opening price likely higher than $135. The price at this stage is determined by market supply and demand.

The third wave involves forced buying by passive funds, which is the most noteworthy aspect. The Nasdaq 100 is one of the most important indices in the US stock market, comprising 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 positions according to the weighting of each stock in the index.

Normally, newly listed companies wait several months to qualify for inclusion in the index. However, Nasdaq specifically modified the rules for SpaceX, allowing it to be included quickly after only 15 trading days. The original 10% minimum free float requirement was also removed, and a new weighting rule was introduced: even if SpaceX's actual free float is only 5%, the index will still calculate its weighting at a maximum of 3 times, or 15%. After the inclusion took effect, hundreds of funds tracking the index needed to buy SpaceX shares within a few days. With a free float of only $75 billion, this concentrated influx of buying in the short term could easily drive up the price. These funds didn't consider valuations or make any judgments; they simply bought when the rules were met.

The three waves of buying occurred almost seamlessly in the first month after the IPO.

But this supply and demand imbalance will not last forever.

SpaceX did not adopt the traditional 180-day unified unlocking method for IPOs, but instead designed a phased release.

To understand this mechanism, you first need to understand the post-IPO shareholding structure: the newly issued shares in the IPO account for approximately 4.2% of the total share capital, Musk himself holds approximately 42%, and the remaining approximately 54% is held by VCs, early employees, and other internal shareholders. The newly issued portion is tradable immediately upon listing, while Musk's portion is locked up completely for 366 days, with the phased unlocking only affecting the middle 54%.

Specific timetable:

• In the first wave, two days after the Q2 earnings report is released , locked-up shareholders can sell up to 20% of their locked-up shares. If the share price remains 30% above the IPO price at this time and meets the target for 5 out of 10 trading days, an additional 10% will be unlocked. In other words, the earliest batch of insiders may have started selling as early as the beginning of August.
• The second wave will unlock 7% on days 70, 90, 105, 120, and 135 after the IPO , for a total of 35% across the five stages.
• The third wave will unlock 28% after the Q3 financial report is released, with the remainder to be released when it expires in 180 days.

Musk himself has locked up his shares for 366 days and will not participate in any early release. He controls more than 85% of the voting rights, and this commitment is a key support for the market's short-term confidence in SpaceX.

From the time of listing to the end of the year, the market experienced a supply and demand shift that lasted for six months. In the first half, the circulating shares were locked up, and the buying pressure was extremely high; in the second half, the shares were gradually released, and each financial report period was a test of selling pressure.

It's worth noting the timing: by mid-December, when Nasdaq rebalances for its 100th anniversary, the vast majority of insider shares will have been unlocked through previous rounds. With the free float significantly increased, Nasdaq will correspondingly increase SpaceX's index weighting, requiring passive funds to buy more shares. This effectively uses institutionalized forced buying to support the market several months after a large-scale insider sell-off.