Dear Reader,

It's the biggest IPO in history...

Should you buy in now – or wait for a dip?

According to my colleague Joel Litman, who called AMD before it rose as much as 7,100%...

The best answer is: neither.

The biggest opportunity to profit from SpaceX is NOT by touching the regular stock.

While pundits argue whether SpaceX's stock price is "fair" or not...

The biggest chance to profit is happening completely outside of SPCX itself.

It's tied to a hidden project at SpaceX – which has nothing to do with space... but could soon be worth 100 times more than SpaceX's regular launch business.

To learn more about the new SpaceX division already live right now across the American south...

Click here to see a much better way to potentially profit from the SPCX IPO – without touching the stock.

Regards,

Rob Spivey
Director of Research, Altimetry

Gravity Check: Houston, SpaceX Has a Valuation Problem

Reported by Jeffrey Neal Johnson. Posted: 6/16/2026.

The public debut of SpaceX (NASDAQ: SPCX) is officially in the books, and the speed of the price action caught even seasoned institutional desks off guard.

Priced at $135 just days ago, SpaceX quickly re-rated and recently pushed past $225 on intraday volume exceeding 200 million shares. This aggressive accumulation briefly sent it beyond the $2.5 trillion market capitalization threshold, cementing SpaceX as one of the most valuable businesses on the planet.

The euphoria surrounding the commercialization of low-Earth orbit is palpable, and the broader space economy represents a generational growth frontier. But separating the structural business from the current trading action is an essential survival skill. Behind the headline-grabbing valuation, a potent mix of engineered float scarcity, speculative derivatives trading, and immediate dilution is creating a localized market anomaly.

When SpaceX trades at roughly 20x projected 2027 sales and posts an annual net loss of $4.94 billion, the valuation multiple demands flawless operational execution. Right now, the underlying data suggests the downside risk for SpaceX is increasingly asymmetric.

Ignition Sequence: Retail Fuel and Float Scarcity

To understand the current price action, you have to look beneath the underlying shares and examine the derivatives market.

The June 16 start of options trading acted as an accelerant to an already constrained float.

Over 600,000 contracts exchanged hands within the first few hours of trading, and those trades were heavily skewed toward out-of-the-money weekly calls.

This type of retail-driven options frenzy triggers a mechanical market reaction known as a gamma squeeze. When retail traders buy massive blocks of call options, the market makers on the other side of those trades are forced to buy SpaceX stock to hedge their directional risk. Because early SpaceX employees and insiders are tightly restricted by post-IPO lock-up agreements, the available public float is acutely constrained.

When massive buying demand collides with a severe shortage of available shares, the price of SpaceX can completely disconnect from actual business fundamentals. This kind of rally is driven more by market mechanics than by near-term fundamentals. Because this momentum relies on a temporary supply shortage rather than true business growth, the current upward trend is incredibly fragile.

Paper Rockets: Acquiring Cursor With Inflated Shares

Adding to the complexity is SpaceX's aggressive movement into major acquisitions. SpaceX recently disclosed a $60 billion all-stock acquisition of artificial intelligence (AI) coding startup Cursor's parent company, Anysphere.

When corporate boards execute massive acquisitions using stock rather than cash, they send a subtle but critical signal to the market. Leveraging a $2.5 trillion market capitalization to absorb a pre-revenue AI software architecture is a bold strategic maneuver from SpaceX executives, but it introduces immediate friction for retail shareholders.

The Cursor transaction could dilute the existing shareholder base by about 2-3% just days after the initial public offering. Expanding the outstanding share count while navigating a severe cash-burn cycle creates a structural headwind. Commercializing heavy-lift launch vehicles and expanding global Starlink satellite internet coverage requires immense capital. Diluting the SpaceX equity base to fund tangential AI ambitions introduces execution drag to an aerospace sector manufacturer already priced for perfection.

Gravitational Pull: The Tesla Consolidation Rumor

Retail excitement is receiving additional thrust from unconfirmed rumors of a corporate consolidation between SpaceX and Tesla (NASDAQ: TSLA).

Speculation that Tesla will merge with SpaceX is actively inflating the premium that traders are willing to pay for SpaceX stock.

Some Wall Street analysts have even assigned an 80% probability to a Tesla-SpaceX combination within the next 12 months.

A theoretical conglomerate that consolidates artificial intelligence, robotics, terrestrial electric vehicles, and aerospace divisions into a single $3.5 trillion entity makes for excellent headlines. However, a megamerger of this scale introduces massive antitrust friction. Regulators will likely scrutinize the monopolistic implications of merging the dominant domestic EV infrastructure provider with the primary orbital launch company.

Treating Tesla consolidation rumors as an immediate bullish catalyst ignores the harsh realities of regulatory oversight. If the Tesla rumors fail to materialize into definitive corporate action, the speculative premium currently embedded in SpaceX will evaporate.

Escape Velocity: The Satellite Rebound

The gravitational pull of the historic SpaceX IPO had a predictable secondary effect on the broader market. It drained liquidity from the rest of the orbital sector. Portfolio managers and retail traders aggressively liquidated positions in smaller space infrastructure companies to reallocate capital toward the headline SpaceX event.

This capital rotation triggered sharp selloffs across the board. The Procure Space ETF (NASDAQ: UFO) dropped 7%, while highly specialized mid-cap operators faced sudden double-digit declines.

Some investors recognize that this sector dilution represents a mispricing of risk. The temporary liquidity drain is not a reflection of deteriorating fundamentals in the broader aerospace market, but rather a mechanical side effect of portfolio rebalancing. This temporary capital flight creates highly attractive entry points for pure-play satellite operators.

AST SpaceMobile (NASDAQ: ASTS) experienced a rapid 20% drawdown during the immediate SpaceX IPO frenzy but is already staging a rebound. AST SpaceMobile has a significant commercial catalyst with the deployment of three advanced BlueBird satellites, scheduled for a June 17 launch.

Similarly, established launch providers like Rocket Lab (NASDAQ: RKLB) offer operational consistency, growing backlogs, and proven payload delivery without carrying the astronomical forward multiple of SpaceX.

AST SpaceMobile and Rocket Lab stand to benefit from the exact same macro tailwinds, specifically the rapid reduction in orbital launch costs and the commercialization of space, but offer a vastly superior risk-to-reward profile for fresh capital.

Impact Warning: The Impending Q2 Lock-Up Expiration

The speculative premium currently supporting the SpaceX valuation faces a definitive expiration date. The Q2 earnings report will trigger the first major insider lock-up expiration, releasing an initial 20% tranche of restricted SpaceX shares into the open market.

This event will begin to ease the float scarcity that is currently driving the gamma squeeze. Institutional short sellers are already aggressively positioning for this liquidity cliff, driving up borrowing rates on the limited SpaceX float.

When a sudden influx of fresh supply collides with a market lacking institutional buyers willing to step in at 20x forward sales, the resulting mean reversion is often violent. Investors heavily allocated to SpaceX may want to evaluate their risk parameters carefully as the lock-up expiration approaches.

Those seeking to capitalize on the legitimate secular growth of the space economy might find more durable value by rotating into the heavily discounted satellite and launch infrastructure operators that were temporarily left behind in the SpaceX IPO frenzy.

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Build On a Strong Earnings Season With These 3 ETFs

Author: Nathan Reiff. Article Published: 6/12/2026.

Despite numerous reasons investors might expect otherwise, 2026 appears to be off to an excellent start across much of the market. As shown by strong earnings growth that often tops analyst expectations, solid revenue gains, and continued margin expansion, the AI-driven market boom has remained resilient.

While not every segment of the market has flourished, the rally extends beyond information technology. Financial stocks, for example, have also performed well overall. For investors, that broad strength may create an opportunity to benefit through diversified exchange-traded funds (ETFs). Ideally, these investments can help capture market-wide growth while reducing exposure to risks tied to any single stock. One fund focused on overall momentum, one built around price-to-earnings (P/E) ratios, and one emphasizing momentum quality and consistency may be a good place to start.

A Momentum-Focused Fund With Market-Beating Returns

The iShares MSCI USA Momentum Factor ETF (BATS: MTUM) is one of the low-cost factor-based ETFs that have gained significant popularity in recent years. This fund targets a group of large-cap U.S. equities with a recent history of strong share price momentum.

Its underlying index helps ensure diversification across sectors, while sector-level weighting keeps the portfolio from becoming too concentrated.

The result is a fund with about half of its portfolio in technology stocks, with none of its nearly 130 holdings accounting for more than 6.5% of assets. The fund is well established, with close to $26 billion in assets under management and a healthy one-month average trading volume of around 1.5 million shares.

In terms of performance, the momentum strategy continues to deliver: MTUM has returned around 25% year-to-date (YTD) and 35% over the last 12 months. A modest dividend yield of 0.7% adds a little extra appeal. Overall, MTUM is a strong offering at a relatively low fee of 0.15% per year.

Unique CAPE-Based Value Fund With a Dividend Add-On

Economist Robert Shiller's CAPE ratio remains a widely followed valuation metric, and the Shiller CAPE U.S. Equities ETF (NYSEARCA: CAPE) translates that approach into a diversified fund. CAPE seeks to focus on large-cap U.S. equities from the four cheapest sectors, as determined by the CAPE ratio, while also using momentum as a secondary screen to help avoid possible value traps.

As of April 30, 2026, CAPE held information technology stocks, real estate firms, health care names, and consumer discretionary companies. The fund is rebalanced monthly to keep its positioning aligned with current market trends. The strategy is unique, but results have been mixed recently: CAPE is trading roughly flat YTD. That helps illustrate an important point: even when a sector appears undervalued, it does not guarantee that the stocks in that sector will quickly generate returns.

For investors, CAPE may be most appealing as a buy-and-hold ETF. That is partly due to its relatively modest asset base of just over a quarter of a billion dollars and its similarly small trading volume. At the same time, the fund's expense ratio is fairly high at 0.65%, though that is offset by a 1.3% dividend yield.

Quality of Momentum Is Key for This Specialized Active Fund

The Alpha Architect U.S. Quantitative Momentum ETF (NASDAQ: QMOM) is another momentum-based fund. In this case, QMOM factors in one-year returns and, more specifically, a history of small, continuous daily price gains rather than a smaller number of sharp spikes. The fund also focuses on smaller stocks, on the assumption that these companies receive less analyst coverage and may therefore present more mispricing opportunities.

QMOM is actively managed, but its expense ratio of 0.28% would not necessarily suggest that. Altogether, the ETF holds just over 50 different U.S. equity positions, all of which are roughly equally weighted, with no single name representing more than 2.5% of the portfolio. Its largest holdings include Dell Technologies Inc. (NYSE: DELL) and TD SYNNEX Corp. (NYSE: SNX), although the fund does not rely entirely on technology names.

QMOM's approach has generally been successful: the fund has returned close to 17% YTD and offers an appealing dividend yield of about 1.2%. While it is not especially well known, its asset base is approaching half a billion dollars. This fund may therefore appeal to investors seeking a momentum play a little off the beaten path—one that may be especially responsive to strong, sustained earnings performance among companies.