nextbigtrade
Stage Analysis Trader, Creator of Next Big Trade Premium Newsletter
SpaceX might be one of the best IPOs to short in history: it listed into one busted theme at the end of its bull market, space, and another near bust, AI, having latched onto AI just before the IPO after years as a space company. It is super liquid with a huge market cap and a big following that ignores technicals and will hold all the way down in a bear market. x.com x.com
Space stocks could regain high-beta flows as SpaceX lockups end and a probable late-November Anthropic IPO threatens AI stocks, much as SpaceX's IPO hurt space names. Hedge funds are overexposed to the Magnificent Seven and underexposed or max short low-quality high beta; falling rates and toppy oil could make the rotation painful for them through 2027. AST SpaceMobile could benefit as intermittent service triggers agreements and Blue Origin possibly returns to the pad in six weeks. x.com x.com
SpaceX remains well above the range for building a serious long-term position, even though it will eventually be a stock long-term investors wish they had owned earlier. Young IPOs need time for price discovery, and the price paid still matters despite strong fundamentals: revenue up 92%, Starlink subscribers up 101%, AI revenue up 248%, adjusted EBITDA up 191% and about $100B of cash and securities. x.com
Virgin Galactic is vaporware that has burned retail investors, while SpaceX is a much better space play. Investors selling Virgin Galactic are not mistaking it for SpaceX; they are recognizing that difference. x.com
SpaceX's IPO looks asymmetric to the downside, and as a mispriced mega cap it is a rare short where losses can be sized without fearing a 2-10x move. Elon's $50B social media machine, aggressive float constraints and penalties on retail sales were not enough, and the listing wreaked havoc on other AI names. That sets an ugly precedent for an Anthropic IPO, which could hurt the whole AI trade if it is gutted out of the gate. The base case is not a horrible outcome. x.com x.com
SPCX still looks too pricey after its post-IPO pullback. IPO hype pushed it to 150x 2026 EV/EBITDA, and the pullback has only brought that down to 130x. By comparison, Nvidia trades at 21x next-twelve-month EPS for 88% expected growth in FY27, a 0.25x PEG. x.com
SpaceX looks due for a bounce because sentiment has become extremely negative and stretched rubber bands snap. The stock fell from $171 on June 30 to $108, its lowest close, on worries about the lockup, high beta and AI, and permabears declaring victory is a contrarian sentiment signal. Large holders likely hedged with shorts or puts on SpaceX or on AST SpaceMobile, Rocket Lab, Planet Labs and Intuitive Machines, and that unwind could be violent. The negativity should abate. x.com x.com x.com … Show more
The AI stack's prolonged selloff may have already de-risked it ahead of Anthropic's IPO. The mid-November IPO could mark a bottom rather than trigger another sectorwide selloff like earlier mega-IPOs. Nebius, IREN and Cipher Mining do not look likely to fall much further; the same goes for Applied Optoelectronics and AXT. From June highs, Cipher is down about 73%, IREN 62%, Nebius 45% and WhiteFiber 78%. x.com x.com
SpaceX's stock is the most egregious case yet of retail investors being manipulated into serving as exit liquidity for Wall Street. Its fall was expected by everyone, even if the timing was not. x.com
With 208 million SpaceX shares sold short, it is a good day to remind everyone of the bullish case. x.com
SpaceX shares will probably drop into the $60s after the lockup expires, so now is not the right time to get involved. x.com x.com
