The SpaceX IPO is finally here — don’t miss tomorrow’s SpaceX IPO Event with Lance Ippolito, Nate Tucci, Graham Lindman, and Alex Reid! — and the way they’re structuring this offering is completely different from what we typically see.
The SpaceX IPO is pulling a major liquidity vacuum through the market, and it’s creating the kind of pressure I have been warning about in recent daily updates.
The IPO locks today, disperses Thursday and begins trading Friday. There’s also a 2x leverage ETF scheduled to launch that same day (which raises real questions about how anyone builds a leveraged product before shares or options exist, adding even more risk before price discovery begins).
This will be one of the largest IPOs in years, with hype levels that remind me of Meta Platforms (META). META went red on day one, then fell roughly 50% and did not reclaim its IPO price for about 15 months. Major IPOs often take 12 to 18 months to find a true bottom and as long as one to four years to build a base strong enough for a sustained move higher. SpaceX could follow a similar pattern.
Be extra cautious with leverage — options are expected to lag by two days to two weeks.
The Forced Buying Narrative Just Collapsed
The S&P 500 (SPY) will not add SpaceX to the index on day one. I do not expect the Nasdaq 100 (QQQ) to include it either. That means the forced buying narrative many traders pushed is not happening. Without that artificial demand, traders searching for early exposure are turning to so‑called synthetic versions circulating in parts of the crypto market, which only adds another layer of speculation and risk.
Typical IPO behavior is an initial pop, then an unwind as hype cools. A 50% drop over 12 to 18 months is common, followed by a long base-building period. Could SpaceX break the pattern? Maybe, but the odds are not great.
Another issue hits today: Anyone buying SpaceX must have funds settled by the 4 p.m. ET close. That money must be free and reserved in the account, which creates another liquidity drain as traders pull cash from existing positions.
The Real Problem: A Perfect Liquidity Storm
SpaceX is trying to pull $75 billion out of the market. Alphabet (GOOGL) is pursuing $85 billion in dilution and META up to $145 billion. Combined, that is an enormous liquidity extraction hitting all at once. To make matters worse, we’re seeing circular funding loops like the situation where Anthropic buys billions in chips from Broadcom (AVGO) using money AVGO itself provides — liquidity recycling instead of real capital entering the system.
S&P 500 performance has a 98% correlation to global liquidity. When liquidity gets sucked out, price tends to follow. With this much capital being absorbed simultaneously, the market faces meaningful pressure. We may be setting up for an epic correction of some sort, and while the depth is uncertain, the setup looks potentially severe.
This week also brings CPI, which came in hot this morning, PPI and consumer expectations data, stacked directly on top of the IPO timeline. Add a new Fed Chair who favors less telegraphing and more surprise, and conditions could turn volatile fast.
Be careful. Be careful. Be careful. This is a treacherous setup.
Jeffry Turnmire
Jeffry Turnmire Trading
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