The market capitalization of SpaceX has soared to $3 trillion: the key factor is a shortage of shares.
SpaceX (SPCX) shares have shown unprecedented growth, reaching a market capitalization of around $3 trillion. This figure allowed the company to surpass tech giants like Amazon and Microsoft. Such a rapid surge occurred less than a week after the initial public offering, which valued the company at $1.75 trillion.
In just a few trading days, SpaceX has broken into the ranks of the most valuable public companies in the U.S. Analysts call this surge unprecedented in its speed and scale.
Reason for the sharp rise: the mechanics of an extremely low free-float
During the IPO, only about 4% of the total issued shares entered the market. The remaining 96% are locked up with insiders, employees, early investors, and large institutional holders, subject to a phased unlocking schedule.
When buyers enter the market, they encounter a tiny volume of shares available for trading. There are virtually no sell orders in the order book, so the price must jump sharply to attract any sellers. This mechanism—a supply deficit amid high demand—is the main driver of such aggressive price growth.
The key nuance lies in how market capitalization is calculated. It is computed based on all issued shares, including the locked-up 96%. Therefore, the final figure exceeds $3 trillion, even though only a small portion of the shares are actually traded. This is the mechanics of an extremely low free-float on an unprecedented scale.
What will change after the unlock
Insiders are not yet allowed to sell their stakes: the unlocking is happening in stages. The first major batch will hit the market in August, after the debut earnings report. Subsequent waves will come in the fall, tied to financial results, with the rest distributed through December. Additionally, Elon Musk's shares are frozen for 366 days.
For now, supply is effectively locked up, but this is temporary. With each unlocking date, the number of available shares will increase in waves. And if purchases were mostly speculative, the balance could shift sharply once sellers gain access to the market. This is a squeeze under supply deficit conditions, which will inevitably lead to a correction.
My analysis: A market capitalization of $3 trillion is an impressive but largely illusory figure, based on extremely low liquidity. Once mass unlocking begins, selling pressure could lead to a significant correction. Investors should be extremely cautious and not succumb to euphoria—the current price of SPCX does not reflect the company's fundamental value but is the result of a temporary supply deficit.