Key insights
- The author questions the validity of SpaceX's (SPCX) price discovery in its early trading days. They argue that limited selling from IPO-allocated holders (due to risk of losing future allocations) and insiders, combined with buyer excitement, might be artificially inflating the price rather than reflecting true demand. This suggests the initial price action may not be a reliable indicator of long-term value or market sentiment.
I keep seeing people talk about the SpaceX price like it already proves demand is insane, but I’m still stuck on the selling side. If IPO allocated holders risk losing access to future IPOs by flipping, and insiders/large holders aren’t really selling yet, then how much of this is actual price discovery? A price can go up fast when buyers are excited and natural sellers are basically discouraged from selling. Maybe that’s just how IPOs work, but it feels weird watching everyone treat the first few days like a normal market.