SpaceX’s highly anticipated initial public offering (IPO) could lead to a meme stock trading frenzy similar to that of GameStop and AMC Entertainment Holdings. The company, which plans to raise up to $75 billion at a valuation of $1.75 trillion, has all the ingredients for such behavior – a massive narrative, a founder with a loyal following, and valuation likely driven by future potential.
Industry experts warn of stock market volatility after SpaceX goes public, with PitchBook analyst Franco Granda saying “I think the stock will be all over the place.” The company’s ambitious goals, including colonizing Mars, have created a cult-like following on social media, similar to GameStop and AMC Entertainment Holdings.
SpaceX’s allocation of 30% of shares to retail investors increases the likelihood of meme-stock-like trading behavior. Tesla, which Musk also leads as CEO, has been referred to as a meme stock due to its share-price volatility and focus on future goals over current fundamentals. While some experts argue that neither SpaceX nor Tesla would fit the mold of a meme stock, others see potential for speculative fervor and viral momentum in SpaceX’s valuation.
The space sector itself is no stranger to meme stocks, with companies like AST SpaceMobile and Rocket Lab already listed on the Roundhill Meme Stock exchange-traded fund. While some experts believe SpaceX’s IPO could bring more attention to the space trade and boost trading activity, others warn that it may also attract institutional investors and absorb interest that might have otherwise gone to smaller stocks.
Overall, as SpaceX prepares for its public launch, industry experts are bracing themselves for potential stock market volatility and speculation surrounding the company’s valuation.
Source: https://www.marketwatch.com/story/why-spacex-could-trade-like-a-meme-stock-after-its-blockbuster-ipo-1e03a564