SpaceX’s initial public offering was a huge success by anyone’s standards, and the company has continued to do well ever since. On Tuesday, the third day of trading, the stock peaked above $225 per share, before closing well off its high at $201.68. For most of the day, Elon Musk’s rocket and AI company had a market capitalization larger than Amazon, worth $2.65 trillion. They ended the day almost evenly matched. The question to ask now: Did the IPO and early trading reveal the true demand for SpaceX stock, or are we still in the honeymoon period where you can’t overvalue the stock or do anything wrong, before reality begins to settle in? That doesn’t say anything about the company itself. Only a fool would bet on Mr. Musk given his track record at Tesla. What SpaceX has managed to accomplish since its founding over 20 years ago is nothing short of legendary. The team is working on a fully reusable rocket called Starship that literally launches rockets and could change the economics of the space industry. The company places satellites in low Earth orbit to bring internet to the masses through its Starlink service. And with its February acquisition of Musk’s xAI, owner of social media site X and Grok chatbot, SpaceX is developing plans to build data centers in space while also competing with the world’s best AI companies. On Tuesday, it also announced a $60 billion deal with AI coding startup Cursor. However, just because a company is innovative does not necessarily mean that it is properly valued, and therein lies the problem with SpaceX stock. We don’t actually know what this company is worth, and it’s likely going to take weeks or months to find out. Musk’s five- to 10-year vision may be compelling, but timelines matter. And when it comes to unproven technologies like orbital data centers, the exact timeline is uncertain. As it stands, SpaceX is a company with little profit, a cash-rich need to meet its goals, and a achievable market forecast totaling trillions of dollars that some might call optimistic. SPCX Mountain 2026-06-12 SpaceX’s performance since its debut on June 12th The real problem is the lack of price discovery. It’s been a few days since SpaceX stock went public, but to say we’re seeing genuine price discovery is, well, an overstatement. First, before its initial public offering, the company chose to name its own price at $135 per share, essentially bypassing the pricing process that typically occurs in IPOs, where bankers set a price range based on signals and feedback they receive from buy-side investors. Additionally, there are changes to index inclusion rules by Nasdaq and FTSE Russell that will allow SpaceX to be included in indexes at an accelerated pace compared to past IPOs. Nasdaq has changed some of its requirements to make it easier for big technology companies to join the popular Nasdaq 100 index immediately after going public. This could benefit not only SpaceX, but also OpenAI and Anthropic, which are planning big IPOs of their own. Among the changes is the removal of a minimum float requirement that required at least 10% of a company’s stock, or “free float,” to be freely traded to qualify for inclusion in the index. Instead, Nasdaq adopted a calculation system that limits the weighting of low-float stocks. This designation applies to SpaceX, which sold only about 5% of its stock in its IPO. Indeed, the size of that float will increase over time as the lockup period ends (lockups prevent insiders and early investors from selling their shares for a period of time, and SpaceX uses an unusual lockup schedule). Perhaps the most relevant change to the Nasdaq is to the so-called seasoning window for vetting new stocks. Companies used to require seasoning for up to a year. However, SpaceX’s seasoning period is only 15 days, making it eligible to join the Nasdaq 100 after just three weeks of trading. FTSE Russell, which manages the Russell 3000, 2000 and 1000 indexes, among others, will become eligible for inclusion after just five business days, without waiting for the next quarter’s reconstitution. FTSE Russell also revised its minimum float requirement of 5%. A common argument in favor of fast-track changes is that the index should reflect the broader stock market universe. Providers essentially argue that excluding large companies that are currently listed would defeat their purpose. This predicament is primarily a predicament caused by startups remaining private for long periods of time and debuting at much higher valuations than before. Notably, the company that oversees the S&P 500 has chosen not to change its hiring rules. One of the requirements for joining the S&P 500 is that a company be profitable on a trailing-quarter and trailing-12-month basis, but SpaceX can’t check that box right now, and it could be a while before it can. The impact is the same for Nasdaq and FTSE Russell. Funds that track indexes that add SpaceX should buy the company’s stock without being price sensitive. As a result, every active investor in the world now knows that they have several weeks before a stock enters widely held passive index funds. Invesco’s exchange-traded fund, which tracks the Nasdaq 100 and is known as QQQ, has about $500 billion in assets under management. The bottom line is that SpaceX hasn’t gone through the actual pricing process yet. It will begin after index funds complete their purchases, and the real test will come in the coming months when lock-up periods begin to end, bringing more supply to the market. As SpaceX’s float size increases, its adjusted weight in the Nasdaq 100 also increases (per the calculation system described above). This means that more supply is brought into the market and at the same time forced index purchases are made. Perhaps that will help cushion some of the impact of the lockup expiry, but time will tell how this push-pull tension is resolved. Those who want to bet on Mr. Musk’s grand vision have the right to do so. Naturally, he captured the imagination of many people. Jim Cramer said it best at Tuesday’s morning assembly: “This is what has captured the American heart.” However, it’s also important to understand that there’s more than meets the eye when it comes to stock prices surging. Currently, not all buying is done based on fundamentals. We’re still a long way from knowing SpaceX’s true value, but this journey is likely to be even more eventful than the first three business days. (The Jim Cramer Charitable Trust is long AMZN. 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