SpaceX's market capitalization has soared to $3 trillion: the main secret lies in supply shortage
SpaceX (SPCX) shares reached a market capitalization of about $3 trillion just days after their initial public offering, leaving behind giants like Amazon and Microsoft. The company crossed this milestone less than a week after its IPO with an initial valuation of $1.75 trillion. Such a surge is unprecedented for the stock market.
As my analysis shows, the reason for this rapid growth lies not in the fundamental business metrics, but in the unique supply structure. During the IPO, only about 4% of the total issued shares were released to the market. The remaining 96% are locked up with insiders, employees, early investors, and large institutional holders according to a phased unlocking schedule.
Mechanics of Scarcity and the Valuation Paradox
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 is forced to jump higher to draw out any sellers. This is a classic example of extremely low free-float mechanics, but in this case, on an unprecedented scale.
It is important to understand how the final market capitalization is calculated. It is based on all issued shares, including the locked-up 96%. Therefore, the final figure exceeds $3 trillion, even though only a small portion of shares are actually traded. This creates an illusion of enormous value that can be extremely volatile.
Unlocking Schedule and Correction Risk
Insiders are currently not allowed to sell their stakes. The first major batch will hit the market in August, after the debut earnings report, followed by more in the fall tied to financial results, with the remainder distributed through December. Additionally, Elon Musk's shares are locked for 366 days.
For now, supply is effectively blocked, 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 classic squeeze under supply scarcity, which could lead to an equally sharp correction.
My expert conclusion: SpaceX's current market capitalization is not so much a reflection of the business's value as it is a mathematical artifact caused by an extreme shortage of liquid shares. Investors should be extremely cautious: after the mass unlocking of shares begins, the market may face serious selling pressure. For now, it is a game of speculation for the bold, but the fundamentally justified price could be significantly lower than current levels.