SpaceX limits market impact as nearly a third of shares trade

Ahead of the initial public offering in June for SpaceX, the private rocket and satellite company run by Elon Musk, experts worried the volatile stock would hit the Nasdaq-100. Yet the reality has been far more tame, according to new research from Goldman Sachs, the giant Wall Street investment bank.

Ben Snider, an analyst at Goldman Sachs, said in a note that outside of short-term trading, SpaceX has had a much smaller impact on equity indices than expected. One way the company limited volatility was a complicated lock-up schedule that unlocks insider stock in batches.

Nearly a third of SpaceX shares are currently available, up from 5% in June, according to Goldman Sachs. That has mitigated the impact of SpaceX on the Nasdaq-100 index despite its turbulent stock price. SpaceX shares currently trade at about $142, compared with their initial public offering price of $135 and an early peak of $225.64.

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Passive exchange-traded funds owned about $32 billion of SpaceX shares at the end of October, with $20 billion tied to funds benchmarked to the Nasdaq-100, according to Goldman Sachs. Adam Jonas, an analyst at Morgan Stanley, the major investment bank, noted that lockup expiration dates have largely proved to be a non-event.

Snider likened SpaceX to its sister company, Tesla, the electric carmaker led by Elon Musk, which also saw a muted impact when it joined the S&P 500 index in 2020. SpaceX isn’t currently eligible for the S&P 500 because of profitability rules, but Goldman Sachs estimates it could be added toward the end of next year.

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