A ******* eX rocket crashed into the moon at 2 a.m. Wednesday, leaving a massive crater and another piece of "space junk" on its surface. But that will be only the second-biggest dump of ******* eX's week.
On Thursday, nearly a billion shares of ******* eX, held by early employees and pre-IPO investors, will finally break free from their lockups. The shares, totaling around $100 billion at current prices, are more of a supply shock than the entire IPO itself. And while ******* ysts worry that it will cheapen the stock—or, as Morgan Stanley suggests, provide an opportunity "to gain exposure to a potential generational compounder"—SpaceX avoided the worst of this moment by quietly lining up its buyers before the lockup clock even started running.
Every IPO eventually meets this moment, cautioned Gil Luria, head of technology research at D.A. Davidson. Early employees might believe wholeheartedly in the company, but after spending decades with most of their wealth tied up in a single stock, they may want to diversify—buy a house, maybe.
That transfer from private-company insiders to public-market investors is the "natural course of business," he said—but, by definition, it puts pressure on the share price as fresh supply enters the market.
Within 25 days of listing, four index providers—CRSP, FTSE Russell, MSCI, and Nasdaq—added the stock, forcing passive funds inside millions of 401(k)s to buy in. While it's unclear how much ******* eX stock passive funds took on, JPMorgan estimates that the Nasdaq inclusion alone transferred $4 billion of ******* eX into passive accounts. Luria calls the accelerated path into the indexes "a little bit of a bailout."
#Stock
On Thursday, nearly a billion shares of ******* eX, held by early employees and pre-IPO investors, will finally break free from their lockups. The shares, totaling around $100 billion at current prices, are more of a supply shock than the entire IPO itself. And while ******* ysts worry that it will cheapen the stock—or, as Morgan Stanley suggests, provide an opportunity "to gain exposure to a potential generational compounder"—SpaceX avoided the worst of this moment by quietly lining up its buyers before the lockup clock even started running.
Every IPO eventually meets this moment, cautioned Gil Luria, head of technology research at D.A. Davidson. Early employees might believe wholeheartedly in the company, but after spending decades with most of their wealth tied up in a single stock, they may want to diversify—buy a house, maybe.
That transfer from private-company insiders to public-market investors is the "natural course of business," he said—but, by definition, it puts pressure on the share price as fresh supply enters the market.
Within 25 days of listing, four index providers—CRSP, FTSE Russell, MSCI, and Nasdaq—added the stock, forcing passive funds inside millions of 401(k)s to buy in. While it's unclear how much ******* eX stock passive funds took on, JPMorgan estimates that the Nasdaq inclusion alone transferred $4 billion of ******* eX into passive accounts. Luria calls the accelerated path into the indexes "a little bit of a bailout."
#Stock
1 month ago
