Opinion: SpaceX Stock Will Initially Soar, but Its Smoke-and-Mirror Optics Won't Last Beyond 2 Months

The most anticipated event of the year is now just two days away. On June 12, Elon Musk's SpaceX will go public and shatter the previous record for the largest-ever initial public offering (IPO).

The Nasdaq Composite (NASDAQINDEX: ^IXIC), Nasdaq-100, and S&P 500 (SNPINDEX: ^GSPC) have soared ahead of SpaceX's debut. This nearly $1.8 trillion company combines two of Wall Street's hottest trends (artificial intelligence (AI) and the space economy) with a CEO (Musk) who successfully turned Tesla into a trillion-dollar business.

But the impending SpaceX IPO is historic in more ways than one. Longstanding index inclusion criteria were rewritten ahead of this monumental debut -- and these changes are sending ripples through Wall Street.

Image source: Getty Images.

While new structural dynamics have created an environment that can artificially prop up SpaceX's stock in the weeks after its June 12 IPO, these smoke-and-mirror optics should lead to an epic collapse by August, or perhaps even sooner.

Rules were rewritten ahead of the SpaceX IPO, which should help shares initially soar

Arguably, the most notable changes we've witnessed ahead of SpaceX's imminent debut are the criteria for index inclusion. Several safeguards that oversight committees put in place have been torn down to make way for Musk's other trillion-dollar company.

For example, Nasdaq (NASDAQ: NDAQ) Global Indexes made several changes to its Nasdaq-100 methodology. The minimum 10% float requirement -- float represents the number of tradable shares of a security -- was shelved for the Nasdaq-100, and the timeline for inclusion was lowered from around three months to just 15 trading sessions for non-financial companies that would rank among the 40 largest in the index. Accounting for the Juneteenth and Independence Day holidays on Wall Street, SpaceX can enter the Nasdaq-100 on July 7.

The U.S. Russell Equity Index Series also made notable changes to its inclusion criteria. For the last 22 years, the Russell U.S. Indexes have added IPOs on a quarterly basis. Ahead of the SpaceX IPO, this timeline has been shortened to just five trading days.

NEW: Fidelity lowers the minimum account requirement for the SpaceX IPO from as high as $500,000 to just $2,000.

-- Polymarket (@Polymarket) June 4, 2026

Even select brand-name brokers have altered long-standing policies for the SpaceX IPO. Traditionally, Fidelity has required clients to have $500,000 in their accounts to participate in IPOs. For SpaceX, Fidelity slashed the capital requirement to (drum roll) just $2,000!

The methodology changes for the Nasdaq-100 and U.S. Russell Equity Index Series will force funds that attempt to mirror these indexes to purchase SpaceX stock for several weeks after its debut.

SPACEX IPO OVER-SUBSCRIBED AHEAD OF RECORD $75B LISTING

SpaceX has already received orders exceeding available shares in its $75B IPO, suggesting strong demand shortly after marketing began. The offering, priced at $135 per share, could value the company at about $1.8T. Trading...

-- *Walter Bloomberg (@DeItaone) June 5, 2026

But index fund and retail investor demand are only part of the story.

SpaceX is selling approximately 555.6 million shares at $135, raising the aforementioned $75 billion. But these 555.6 million shares represent a little over 4% of its outstanding shares. Most IPO's typically sell 10% to 20% of their outstanding shares.

Index funds will gobble up a sizable portion of this historically low float, providing an artificially high floor for SpaceX shares in the weeks following its June 12 debut.

Image source: Getty Images.

The SpaceX rug pull is coming, and retail investors will be left holding the bag

But thanks to another unconventional aspect of the SpaceX IPO, these smoke-and-mirror optics can only last so long.

A 180-day lockup period is customary for a newly public company. The lockup period, which begins the day a company debuts, disallows insiders (high-ranking executives, board members, and select early investors) from selling their shares.

SpaceX has thrown historical customs out the window. In addition to setting its $135/share IPO price before its roadshow even began, the company outlined a staggered lockup period, somewhat similar to what Cerebras Systems did with its recent public debut.

Though Elon Musk won't be able to sell any shares for 366 calendar days, other insiders will have several unlock milestones to dump their holdings. The first comes on the second trading day after the company's first quarterly report as a public company (in August). If SpaceX's stock is more than 30% above its IPO price, an additional share unlock is achieved. Several other time-based milestones exist at calendar days 70, 90, 105, 120, 135, and 180 post IPO for shares to unlock.

Great look at the SpaceX shares unlock schedule as well as the potential passive buying schedule from @JSeyff @FrancisSharoon Depending on the early post-IPO returns, this could really play with and disperse the returns of "passive" funds (which is why there's arguably no such... pic.twitter.com/KOuEkJlngF

-- Eric Balchunas (@EricBalchunas) May 28, 2026

Once insiders have the green light to begin selling shares, you're going to witness the greatest wealth transfer from retail investors to company insiders in history. SpaceX's artificially propped-up share price, caused by rule changes and forced fund purchases, will quickly weaken as new shares become available from insiders.

The company's first quarterly report as a public company in August will also serve as a reminder to investors of just how expensive and unproven Musk's space and AI company is.

Many of SpaceX's operating segments require significant capital, and most are losing a lot of money. Looking beyond the company's touted adjusted EBITDA reveals a net loss of $4.9 billion last year.

SpaceX's valuation of $1.77 trillion also equates to a price-to-sales (P/S) ratio of approximately 95, compared to full-year revenue in 2025. For context, no public company at the forefront of a next-big-thing trend (let alone two hot trends, AI and the space economy) has ever sustained a P/S ratio above 30 over the long term.

Structural changes that initially force the purchase of SpaceX stock and limit its float can pump up its shares over the first few weeks. But these smoke-and-mirror dynamics are likely to give way to a steep sell-off thereafter as insiders cash out and SpaceX's generally disappointing operating results come into focus.

Sean Williams has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Tesla. The Motley Fool recommends Nasdaq. The Motley Fool has a disclosure policy.