Wall Street Already Made Billions on SpaceX—Now They Need You

In today's Wall Street Truth Bomb, we break down why Nasdaq index additions often mark short-term tops, how institutional investors front-run index funds, and why retail investors may be providing exit liquidity.

We'll cover:

SpaceX's record-breaking IPO
Nasdaq 100 inclusion mechanics
Historical index performance
Why institutions may already be selling
Valuation risks
Macro headwinds
Federal Reserve outlook
What investors should watch next

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Truthbombs videos are for informational and entertainment purposes only. The views expressed by Mark Malek or guests are their own and do not necessarily reflect those of Siebert Financial. These videos do  not constitute investment advice, an offer to sell, or a solicitation to buy any securities. Past performance is not indicative of future results. Listeners and viewers should consult a qualified financial professional before making any investment decisions.

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Transcript

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Tomorrow morning, SpaceX joins the NASDAQ 100. Millions of retail investors are about to buy a stock at exactly the moment history says to think twice. By the end of this video, you're going to understand exactly why index inclusion is frequently a Wall Street sell signal, dressed up as a buy catalyst, what the actual SpaceX trade was and where the real risk sits for anyone buying SPCX this week. Everyone is talking about SpaceX still. And I get it, Elon Musk, rockets, Starlink, the most powerful rocket ever built, Starship, either working or blowing up spectacularly on a Boca Chica launch pad. SpaceX has done what every tech visionary talks about and almost none can ever deliver. It has made government contracts feel like science fiction. The enthusiasm, though, is real. The question is not whether SpaceX is a great company. The question is what price are you paying for that greatness and whether today is the moment to pay it? Well, let me give you the factual timeline. Facts are always good. SpaceX went public on June 12th, pricing at $135 per share. That was the largest initial public offering in history. I'm sure you've heard they've raised approximately $85.7 billion. On day one, the stock closed at roughly $161, a gain of roughly 19%. The FOMO was instant. By June 16th, just four trading days after the IPO, SpaceX had peaked at 225 bucks intraday. Since then, it's come back down. As of Friday, it was trading at approximately $162, almost exactly where it closed on its first day of trading. Now, here's how the Nasdaq 100 inclusion happened so fast. Effectively, May 1st of this year, NASDAQ changed its rules. How convenient. Any newly listed company ranked in the top 40 by market cap can enter the Nasdaq 100 after just 15 trading days. SpaceX qualified, well, no surprisingly, immediately with a market cap north of $2 trillion. It was never going to miss that threshold. So the inclusion itself was completely predictable from the moment SpaceX priced its IPO, which means Wall Street knew about this the entire time. The argument for buying SPCX heading into tomorrow goes like this: the NASDAQ 100 inclusion forces index funds, specifically QQQ and QQQM, just to name two, to purchase shares at the rebalancing price. JP Morgan estimates $4.3 billion of buying pressure from just that rebalancing alone. Mandatory buying creates demand. Demand drives the prices up. Retail investors who buy before inclusion ride that wave and they profit. It's a clean mechanical story. It has exactly one big problem. The buying already happened. Now, here's the data that changes the calculus. I pulled the history on the NASDAQ 100 inclusions. Of the 35 NASDAQ 100 additions that were announced at least 10 days before being added to the index, only 12 rose on their first day as an index member. 23 out of 35 fell. The average change on day one of index membership is a loss of 1.13%. The average change over the first five trading days as a member of the NASDAQ 100 is a loss of, get this, 3.41%. This is not a coincidence. This is mechanics. When an index inclusion is announced, arbitrageurs and institutional traders buy the stock immediately. They're buying ahead of the forced institutional purchasing that will happen on the inclusion date. They are front-running the index funds and they sell their positions on or around the actual inclusion date when the forced buying provides the exit liquidity that they need. The retail investor who bought SPCX yesterday because of tomorrow's inclusion is not the arbitrageur in this trade. They are the exit liquidity. Now, apply this framework directly to SPCX. The IPO price at $135. Stock closed day one at $161. It peaked at $225.64 just four days later. The people who bought at $135, the institutional allocations, the fast money traders, the arbitrageurs who knew the Nasdaq 100 inclusion was coming in 15 trading days, those people already made their money. The $135 buyer who held for Friday made $27 per share at today's price. The buyers who rode the June 16th peak and sold met and sold made nearly $91 per share. The retail buyer paying $162 today is buying from those people. They're not buying ahead of the trade. They are the trade. This is the shadow data that does not show up on the mainstream media segment about SpaceX joining the NASDAQ 100, the ones that you're probably going to see all day today. The segment will show the chart, they'll show you the chart going up from 135 bucks. It will not show you that the stock is 28% below its June 16th peak. It will not tell you that history says that the first five days after inclusion averaged a loss of 3.41%. It'll not mention the Palantir pattern or the micro strategy pattern or any of the other NASDAQ 100 editions, where the inclusion date was the top tick for retail. And here's the longer-term data. McKinse analyzed hundreds of companies added to the SP 500 and found that initial positive returns from index inclusion typically disappear within 35 trading days. The Federal Reserve Bank of New York found similar results. The money is made between the announcement and the event, not after. Now let me add one more layer to you because the macro environment SpaceX is entering is not neutral. SpaceX is primarily a government contractor. NASA, the Department of Defense, Commercial Launch, Starlink, these are the revenue pillars, and federal spending is not in an expansionary mode right now. Add the consumer overlay from the jobs report that I covered in other videos. 507,000 employed Americans gone from the household survey in June alone. And you have a backdrop where the macro tailwinds that justify a $2 trillion valuation are being tested on multiple fronts simultaneously. Let me be very direct about the valuation. $2 trillion at IPO pricing assumes that Starlink continues to scale, that Starship gets commercialized on schedule, that government contracts expand, and that autonomous space economy matures faster than any comparable technology transition in history. These are not crazy assumptions for a 10-year time horizon, but you're not buying them at a 10-year discount. You're buying them today at $162. One day after the known index, or one day before the known index inclusion event in a macro environment when the VIX is at its 2026 low, and every assumption in the market is load-bearing at the moment. Add the geopolitical overlay. The Iran MOU is in its 60-day negotiating window. This rate of her moves is functionally open, but that hard deadline is coming. Energy markets are still pricing risk. WARSH has made clear that the Fed will not provide forward guidance or a rescue if inflation stays elevated. The next CPI and PCI readings could change the July FOMC probability fast. And I mean real fast. A market price for nothing to go wrong is a market that amplifies every single surprise, even the small ones. And SPCX at a $2 trillion valuation is not a defensive position heading into that type of environment. So your truth bomb for today is this the SpaceX NASDAQ 100 inclusion is not a catalyst for retail investors. It is the day institutional money gets paid. And if you're buying SPCX today because it joined the index yesterday, you are not the trader in the story. You are the trade. Join me every day for Wall Street Truth Bombs, where I drop them right here before the market figures them out.