[Edaily Reporter Kim Kyung-eun] With SpaceX set to go public on the 12th, analysts have suggested that the “supply-demand black hole effect” in global stock markets will be more pronounced in the medium term following its inclusion in the Nasdaq 100 than immediately after the IPO.
Lee Kyung-soo, an analyst at Hana Securities, stated in a report on the 10th, “Since the period between SpaceX’s IPO and its inclusion in the Nasdaq 100 is only about one month, there is little time for concerns over overhang (potential selling pressure) to be reflected in the price,” adding, “It is highly likely that the demand driven by expectations of Nasdaq 100 inclusion will outweigh the overhang burden during this short period.”
On the day of SpaceX’s initial public offering (IPO) on the 12th, the free-float shares will account for 4.2% of the total (556 million shares out of 13.1 billion shares). This is the lowest level among major IPOs in history—less than a quarter of the 15.4% seen during Facebook’s (now Meta) 2012 listing and less than half of LG Energy Solution’s 8.85%. The offering price is $135, and the total funds raised amount to $75 billion, marking the largest in history.
Given the extremely limited float, even small-scale buying or selling immediately after the listing could cause extreme volatility in the stock price. The analyst noted, “Since the lock-up expiry is spread out over six months, the initial impact of capital outflows from the same sector and large-cap stocks is unlikely to be significant.”
The key to supply and demand dynamics lies in the index inclusion schedule. Under the Nasdaq-100 Fast Track rules established in May, inclusion is scheduled for July 7, approximately one month after the IPO, while the Russell 1000 and Vanguard indices will include the stock five trading days after the IPO (around June 19).
Combining these two events, passive fund inflows of approximately $22 billion to $27 billion are expected by early July. However, analysts note that inclusion in the S&P 500 is unlikely in the near term, as the index requires four consecutive quarters of profitability, making inclusion possible only after mid-2027 at the earliest.
There are two periods with the highest concentration of supply and demand. The first is August (following the release of second-quarter earnings), when the initial 20% lock-up period expires. If the stock price remains at least 30% above the IPO price ($175.50) for five out of the ten trading days following the earnings announcement, an additional 10% will be released (for a total of up to 30%). The second is in November (following the Q3 earnings release), which is the single largest release event where 28% is released automatically, regardless of performance.
The analyst stated, “Both time points coincide with a period where passive fund inflows driven by the expansion of the Nasdaq 100 weighting intersect with the release of locked-up shares, creating the strongest ‘supply black hole’ effect,” adding, “SpaceX is expected to significantly outperform.”
The analyst assessed this situation as “very similar to the case in early 2022 when #LGEnergySolution was simultaneously included in the Morgan Stanley Capital International (MSCI) and KOSPI 200 indices immediately after its IPO, triggering a ‘supply black hole’ phenomenon.” However, they added that once the supply-demand event subsides after D+180, there remains a risk of the stock facing a valuation of a price-to-sales ratio (PSR) of 90 times while still operating at a loss.