Episode summary
“A Chaotic 30 Days” | What Happens When SpaceX Goes Public
Excess Returns
· · 56 min · Hosts: Matt Zeigler, Dave Nadig, Cameron Dawson
Summary
The discussion centered on how a SpaceX IPO could become as much a market-structure event as a valuation event. The host and guests argued that a company coming public around a $1.75 trillion valuation, at roughly 100 times sales and with no earnings, would create unusual trading dynamics from the start: a small free float, accelerated index inclusion, options trading, and large passive demand could all collide in the first 30 days. One guest said the stock could become “nothing but a volatility enhancer,” with outcomes ranging from a sharp selloff to a multi-trillion-dollar run.
A guest walked through how index rules could force buying even if the stock is expensive, including a 4 percent float being treated more like 12 percent in the Nasdaq 100 at first, then reweighted as more shares unlock. The guests also compared SpaceX to prior high-multiple names like Palantir and Tesla, arguing that lofty valuations can persist, but that does not make them harmless. They said the real issue is how much price-insensitive demand gets created by index products, passive funds, and short-covering.
The conversation broadened into bubble theory, with a guest arguing that technology bubbles often do have real earnings, even if those earnings are pulled forward. Another guest emphasized that clients should think in terms of structuring and sizing, not just conviction, and that many investors may already own the exposure through broader funds whether they realize it or not.
Key takeaways
- The guests said a SpaceX IPO could be a major volatility event because the first 30 days would combine a tiny float, options trading, and forced index buying.
- One guest argued that a 1.75 trillion valuation at 80 to 100 times sales is hard to justify on fundamentals alone, even if the company ultimately grows into it.
- The guests said the Nasdaq 100’s float adjustment could create outsized demand by treating a 4 percent float as if it were 12 percent until more shares unlock.
- A guest said technology bubbles can still have real earnings, so strong earnings do not automatically disprove bubble-like behavior.
- The advisory takeaway was to focus on sizing, lockups, fees, and unwind plans rather than simply deciding whether SpaceX is “good” or “bad.”
Notable quotes
“the the trading widget that we're going to move around is going to have bizarre and I would say very unpredictable supply and demand components for at least the first 30 days”
“if you want exposure to something, you can't just think about it from the investment case, you also have to think about the structuring of that exposure”
“this is nothing but a volatility enhancer in my book”
“There are real earnings that come from the the investment in this technology”
How the episode opens
To heck with whether you think SpaceX is a good company or not. Just the the trading widget that we're going to move around is going to have bizarre and I would say very unpredictable supply and demand components for at least the first 30 days. To say that what we're experiencing today does not have bubble-l like characteristics because there are earnings actually ignores the long historical record that anytime there is a technologydriven bubble there are always real earnings.
I can absolutely create a very credible, you know, in the middle of the bell curve scenario where SpaceX comes out at 1.75 and trades up to three trillion over the next 24 months and has a series of big wins and everybody gets on board. I can also create a path where we have a 50% selloff next week. I mean there this is nothing but a volatility enhancer in my book.
Those other podcasts, those are clickbait. But this this is clickbait. Should market professionals have private conversations in public?
Well, only to prove that all we know is that we don't know nothing clearly. We've got three rules. Number one, we pre-agreed on a topic.
We picked it out in advance. Number two, while we're live, nobody Googles nothing. Number three, everybody brings a surprise topic to the table for which anything goes.
Who's with me today? The Madonna of Click Beta. Not going to make a preipo version joke, but I will say his version of confessions on a dance floor part two is his current part two at ETF.com, which we in the industry lovingly refer to as his electric bugaloo era.
Fabotic,
I'll take the electric bugaloo era. What else could it be? What? — It's not an era. It's a lifestyle, man.
From the episode’s captions: roughly the first two minutes, lightly cleaned. Keep watching on YouTube →
Topics
- spacex ipo market structure
- valuation vs market structure
- passive fund flows and index buying
- options trading and liquidity
- bubble dynamics
Companies and tickers mentioned
- PLTR
- TSLA
- SpaceX
- Palantir
- Tesla
Watch the episode
Watch ““A Chaotic 30 Days” | What Happens When SpaceX Goes Public” on YouTube
Summary, takeaways and quote selection by Octagon. Quotes are short excerpts; the full conversation is in the episode.
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