SpaceX went public on June 12 at $135 a share, raising roughly $75 billion in the largest IPO ever and debuting at a valuation above $1.7 trillion on the Nasdaq under ticker SPCX. Shares touched an intraday record of $225.64 on June 16 and closed that day at an all-time high of $211.39, pushing the market cap to $2.66 trillion — 142 times 2025 revenue of $18.7 billion.
In May, Nasdaq changed its Nasdaq-100 inclusion rules: mega-IPOs ranking in the top 40 by market cap can now be fast-tracked into the index after just 15 trading days, replacing the old 10% minimum public-float requirement with a weighting cap tied to three times float-adjusted market value. Critics, including investor Jeremy Grantham, called the change a bespoke accommodation for one company. SpaceX joined the Nasdaq-100 on July 7 under this fast-track rule, which should have forced index-tracking funds to buy the stock mechanically.
The forced buying didn't hold the price up: shares closed at $148 on July 8, below the $150 first-day opening price for a second straight session, then fell for four consecutive sessions, briefly dropping below the $135 IPO price. As of Friday's close on July 17, the stock stood at $123.99 — down 45% from its intraday peak and 17% below its first-day opening price.
Index-driven "forced buying" is, at its core, a one-time flow event disconnected from any judgment about fair value. Passive funds have no choice — the rule triggers, they buy — but the size of that buying is capped by how small the actual public float was to begin with, so its marginal effect on the total share count is limited. Most of the anticipated flow had also already been front-run by active funds well before the July 7 effective date. Once the mechanical buying clears, price discovery reverts to real supply and demand — on one side, early employees and pre-IPO holders eager to realize paper gains; on the other, skeptics who don't think 87-142 times revenue is sustainable for a company still posting large losses.
This script has played out before: Palantir fell roughly 25% in the weeks after its own Nasdaq-100 inclusion in late 2024. Passive buying can get a stock into an index — it has never been able to conjure up new long-term holders out of thin air.
Even after the 45% drop, SpaceX's roughly $1.63 trillion market cap is still 87 times 2025 revenue of $18.7 billion, or about 49 times expected 2026 revenue — for comparison, Tesla currently trades around 15 times expected revenue. The company remains deeply unprofitable: a $4.937 billion net loss in 2025, followed by another $4.276 billion in Q1 2026 alone, with losses in the space and AI segments eating into profits Starlink has already delivered. MoffettNathanson analyst Julie Zhu has said plainly that no credible financial model currently supports a roughly $2 trillion valuation.
What's arguably a bigger risk is the wall of lockup expirations ahead: about 20% of shares (roughly 911.5 million Class A shares) unlock on the second trading day after Q2 earnings — expected late July or around Aug. 6 — staggered through Dec. 8, potentially expanding the tradeable float by as much as 40%. The remaining 60%, including Elon Musk's own stake, stays locked until mid-2027. A separate 455.8 million-share performance tranche only unlocks if the stock closes above $175.50 for at least 5 of the 10 trading days before the earnings report — a level that looks out of reach given shares are currently trading near or below the IPO price. Short sellers, meanwhile, have piled in fast: roughly 185 million shares are now sold short, about 29% of the tradeable float and roughly $25 billion in bearish bets, up from an estimated 40 million shares (5-7% of float) just three weeks earlier.
Starlink is already profitable, giving real cash-flow support; government launch contracts provide a revenue floor; Musk's own pull with investors is a variable no spreadsheet captures; the 24/7 Wall St target of $259.42 and analyst consensus of $242.22 imply roughly 86% and 74% upside, respectively.
Even after a 45% drop, 49-87x sales is still expensive for a company posting billions in ongoing losses; the wall of lockup expirations around August will nearly double the tradeable float just as short interest already sits near 29% of it; the "forced buying" tailwind has already been overwhelmed by real selling once, with no reason it holds up better once the float gets bigger.
Most coverage treated "index inclusion forces buying" as inherently bullish, but it's really a one-time flow event, and one that's largely already priced in before it even happens — it says nothing about whether the price is fundamentally supportable. The real signal is what the stock does once the forced buying clears, and SpaceX fell for four straight sessions right through the July 7 effective date — evidence that organic selling was simply larger than the passive bid. That's close to a repeat of the Palantir precedent, which makes it less of a surprise than the headlines suggest.
Also easy to miss: the $1.7 trillion listing valuation was set in an environment of deliberately scarce float and artificially amplified demand — it was never really a price discovered by an efficient market with meaningful supply. The drift back toward the IPO price band looks less like a "crash" and more like overdue price discovery now that the float has widened even slightly. The coming lockup expiration is arguably a more honest stress test: if the stock can hold up once the tradeable float roughly doubles or nearly quadruples and real economic sellers — employees, pre-IPO holders — actually show up, that tells you far more about genuine demand than anything the forced-buying phase ever did.
One takeaway worth carrying forward: when a stock's price action around an index-inclusion date is being explained mainly by "mechanical" or "forced" buying, treat that as a temporary flow effect, not a reason to buy — the same rule that forces passive funds to buy does nothing to stop early holders from selling into it. Once that flow clears, you're left holding the same fundamentals at an inflated entry price. If an index-inclusion story is tempting, it's more informative to watch what happens in the two weeks after the effective date than to buy into the anticipation itself.
This piece is informational, not investment advice. Markets carry risk — decisions are your own.