SpaceX's surge to $3 trillion: Artificial scarcity and 4% free-float
SpaceX shares (ticker SPCX) made an incredible leap, reaching a market capitalization of about $3 trillion just days after the initial public offering. This valuation allowed the company to surpass tech giants like Amazon and Microsoft. For context, the initial IPO valuation was $1.75 trillion. Such rapid growth is a phenomenon I would call unprecedented for the U.S. public company market.
What is the rocket's secret?
The key to understanding this phenomenon lies in the mechanics of an extremely low volume of shares available for free trading. During the IPO, only about 4% of all issued shares entered the market. The remaining 96% are locked up with insiders, employees, early investors, and large institutional holders according to a phased unlocking schedule.
This creates a classic "supply shortage" situation. When buyers enter the market, they hit a tiny volume of available tradable securities. There are virtually no sell orders in the order book, so the price is forced to rise in jumps to "pull" any sellers into the market. Each new wave of buying pushes the price noticeably higher.
An important nuance lies in how the capitalization itself is calculated. It is computed based on all issued shares, including that locked-up 96%. Therefore, the final figure exceeds $3 trillion, even though only a small portion of the securities is actually in circulation.
Unlocking schedule and the future
Insiders are not yet allowed to sell their stakes. The first major batch will hit the market in August, after the debut earnings report. Subsequent unlocking waves are tied to financial performance and are spread out through December. Elon Musk's shares are frozen for 366 days.
For now, supply is effectively locked up, but this won't last long. With each unlocking date, the number of available shares will increase in waves. And if purchases were mostly speculative, the balance could sharply shift as soon as sellers gain market access. This is a classic "squeeze" under supply shortage conditions.
My analysis: SpaceX's current market capitalization is more of a mathematical artifact than a reflection of the business's real value. Investors should be extremely cautious: as soon as mass unlockings begin, we may see a correction as sharp as the surge. The stock market, like the cryptocurrency market, does not forgive neglect of liquidity.