The Space Exploration Technologies (NASDAQ:SPCX) — or SpaceX as most already know it — share price has displayed more volatility in three weeks than a utility stock might in a decade. Moves of 5%-15% are almost the daily norm.
Before the 12 June IPO, some retail investors bought SpaceX shares through their investment platforms. But the number was restricted due to high demand.
However, getting in at the entry price of $135 (£100.65) per share has turned out alright so far, with SpaceX up around 16%. So a £5,000 investment would now be worth roughly £5,800.
Again though, the shares were in short supply. My mate applied for £10k worth and only got allocated £2k. But what about someone who was late to the pre-party and invested £5k on the first day of trading? Would they be up too?
All over the shop
SpaceX stock opened on the Nasdaq at $150, peaked at an intraday high of $176, and closed the session at just under $161. As I type, the share price is $157.
Assuming then that someone was able to invest at $160, they would be sitting on a slight loss. While early days, that would probably feel more disappointing than it sounds given that the stock was at $225 just a couple of weeks ago.
What about the future?
Of course, three weeks is a blink of an eye for SpaceX. Its mission is “to build the systems and technologies necessary to make life multiplanetary, to understand the true nature of the universe, and to extend the light of consciousness to the stars“.
For the record, my mate believes in this vision and has topped up his holding since the IPO. He will tuck the shares away for at least a decade and just let Elon Musk and SpaceX do their thing, believing this will be a significantly larger business by then.
I have some sympathy with this. After all, recent reports say that the company’s planning to launch a Starlink mobile service directly for US consumers.
If so, this would see it take on the likes of T-Mobile, AT&T and Verizon. Analysts at Oppenheimer reckon SpaceX will indeed disrupt the $1.6trn US communications industry.
By the 2030s, SpaceX could also have the 40-storey Starship rocket working reliably. That would lay the foundations for a supercharged Starlink network with next-generation satellites, including potentially space-based data centres, and a highly lucrative commercial cargo corridor to the Moon.
Should SpaceX execute on its mission… it will be the modern-day East India Company of space, controlling routes, infrastructure, and commerce of an entire frontier and giving it a quasi-sovereign reach, far beyond that of any ordinary corporation.
Oppenheimer analysts
A Magpie’s eye view
Nobody knows where SpaceX will be in 10 years, especially as it faces complex technical challenges around Starship reusability and orbital refuelling.
Meanwhile, the AI unit faces earthly competition from Microsoft, OpenAI and Google. My main concern remains loss-making SpaceX’s valuation, with a forward sales multiple of around 64.
This is too spicy for my liking, so I’ll wait patiently for a better price. For now, I see better opportunities in other more down-to-earth stocks.
Should you invest £5,000 in Space Exploration Technologies Corp. - Class A right now?
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Ben McPoland has no position in any of the companies mentioned.
