SPCX - SpaceX

Decision: first watch how things develop after the IPO. I think the IPO price is already very overvalued, but because of the deliberately designed IPO structure, it will probably keep rising to an absurd valuation. At that point I may choose to step in and short it.

Compare P/S with TSLA.

Even compared with TSLA at its peak, SPCX's current P/S is absurd.

When will index funds buy?

• First wave: 6/18 - 6/23
• Second wave: 6/26 - 6/30
• Third wave: 7/6 - 7/8 Nasdaq-100

Build a plan to short SPCX - Plan A

Losses in extreme scenarios.

Decision: follow Plan A and create a 10% short position.

2026-06-16 Tuesday: Options became available.

2026-06-16 Current share price 210. Continue following Plan A and add to 14%.

2026-06-17 On the current Float and subsequent index buying.

• Shares from the Cursor Deal. 60B shares. Closes in 2027Q3. There is also a Lock Up afterward. So this will not become new Supply in the near term.
• Current market cap ≈ $2.52T | Float market cap ≈ $122.2B | Float as a share of total shares ≈ 4.86%

• Estimated retail buying is about $0.5B and leveraged ETFs about $1B. By comparison, the roughly $8B still to come is a little scary.

Current holdings:

Current share price: $154.60 | Current market cap: $2.04T

What a shame. I have made a fair amount, but the initial rise was genuinely terrifying, so I sized the position much more conservatively than I first expected. The maximum position only reached 14%, leaving more room to keep adding if it kept rising. | It still does not feel over. After the Index Funds step in to take the other side, if the stock can rally again, I may consider adding a little more aggressively.

Index buying is not completely over. MSCI / the second wave on 6/26-6/30 and Nasdaq-100 on 7/6-7/8 could still produce a rebound.

• Hedgeye estimates total passive demand over the coming weeks at about 139M shares, previously about $26B using the higher share price. Recalculated at the current $154.60, that is about $21.5B, or about 21.8% of the current public float. The Nasdaq-100 leg alone is about 61M shares, about $9.4B at the current price, or about 9.5% of float.

How index funds buy

The basic process is:

• The index provider announces the constituents and weights.
• The fund calculates its target holding: fund NAV × SPCX index weight ÷ SPCX price = shares required
• The fund manager decides when to execute.
• After the close on the trading day before the effective date, the fund's holdings should be as close as possible to the new index.
• The position is then fine-tuned based on fund creations and redemptions, price changes, and index-weight changes.

Common execution methods include:

• MOC / Closing Cross: trade in the closing auction on the day before the effective date. The advantage is that the execution price matches the index calculation price, minimizing tracking error.
• Buy early in batches: build the position gradually over several days to reduce impact, while accepting tracking error from SPCX moving before entry.
• VWAP algorithm: buy throughout the day according to the volume profile.
• Futures, swaps, or basket trades: obtain index exposure first, then gradually replace it with physical shares.
• ETF creation baskets: authorized participants and market makers deliver shares to the ETF, so the fund does not necessarily sweep the open market directly.

A passive fund manager is evaluated on:

• Did I keep up with the index?

Not on:

• Is SPCX worth $2.2T?

They choose between two types of cost:

• Buy early: price volatility may hurt them.
• Buy at the final close: arbitrage capital may push the price up, but tracking error is smaller.
• Recent research adds another side: these so-called front-runners also take risk early, prepare inventory, and ultimately provide liquidity to index funds. The more arbitrageurs there are, the harder they compete with one another, potentially lowering the impact cost actually paid by the funds.

SPCX's total market cap is about $2.23T, but only about 638.9M shares currently float, roughly 4.86% of total shares:

• Current float market cap: about $108.2B
• Nasdaq's '3× float market-cap cap': about $324.6B | 3 × float market cap
• The market currently estimates SPCX's initial Nasdaq-100 weight at about 0.5%-0.9%. Using $800B of tracking assets as a rough estimate:
• Assumed weight Theoretical exposure Shares at $169.38 Share of current Float
• 0.90% $7.2B 42.5M shares 6.7%

Design a new plan - Plan B

Risk: the July 6 closing auction remains a clear execution point, and SPCX is the first exceptionally large, low-Float, fast-entry case under the new rules. There is no fully comparable historical example.

• But I planned additions after further price increases and left plenty of room. If this really happens, it is actually an opportunity for me too.

The current plan is more aggressive than the previous one, but I also think the period of greatest upside volatility has now passed. Risk has decreased.

Decision: add to 13%.

Nasdaq-100 inclusion is complete. It barely rose and actually fell. The strong upside catalyst I feared most is over. I looked for other upside catalysts that might still remain. | I did not find anything that worries me. The downside driver, on the other hand, is very clear: the upcoming lockup unlock.

Share price $152.70, market cap $2.01T.

Under both previous Plans A and B, I added as the price rose. But the price has actually fallen now. I want to add, and I decided to add, but stay conservative and do not add too much. | This is a one-time deviation because the upside catalysts are exhausted + the unlock is approaching.

Decision: add from the current -11.30% to -14.00%.