By Al Root
The largest IPO in history is about to start trading. SpaceX will make Elon Musk a trillionaire ( officially). Its early trading also will create and destroy billions of dollars of value in a host of other stocks.
Space-related stocks are the first place to look for SpaceX-related movements.
"A listed SpaceX does not validate the comps; it benchmarks them," wrote AgentSmyth, an AI platform designed to bring market intelligence to brokers.
The firm sees risks to space-related stocks that have run up into the IPO. AST SpaceMobile and Rocket Lab are two examples. Through Wednesday trading, shares were up roughly 150% and 290% over the past 12 months. AST stock now trades for about 80 times sales expected over the coming 12 months. Rocket Lab trades for almost 60 times.
SpaceX's $1.8 trillion IPO valuation is at roughly 35 times sales. There are no Wall Street estimates yet. That number relies on growth assumptions and estimates for SpaceX's recent computing deals with Anthropic and Google.
Trading at a premium to SpaceX might not be a good thing. They could "derate," or see their valuation ratios come down, according to AgentSmyth. Intuitive Machines and Redwire are also at risk of derating.
Space stocks are only part of the story; after all, SpaceX isn't really a space company, it's a wireless telecom and artificial intelligence company with rockets.
Shares of Verizon Communications, AT&T and T-Mobile US have all traded lower in recent days, partly on fears of disruption by SpaceX. The SpaceX IPO could have the reverse effect on them that it has on the space sector. Wireless shares could bounce, especially if the IPO doesn't go well.
Defining not going well is important. Closing down on day one would qualify. That's a risk for the entire market. SpaceX is the first money-losing AI company to go public. OpenAI and Anthropic are expected to come later this year.
The development of useful AI underpins the building boom that has supported everything from Nvidia, which sells the chips, to companies such as Alphabet that are monetizing AI tools, to companies such as Caterpillar, GE Vernova, and Vertiv that build, power, and operate AI data centers, not to mention all of the utilities that are up because electricity demand is rising.
A weak SpaceX IPO is a risk to the entire market. Eventually, a successful SpaceX IPO is a risk to many of those companies too. If AI data centers in space are a thing, the terrestrial data center builders will have less business than expected right now. That, however, is an issue for investors to weigh years from now, after the SpaceX IPO.
In late trading Wednesday, SpaceX stock was trading at $163 on Hyperliquid, a cryptocurrency platform for trading perpetual futures -- or futures that never expire. The $162 level implies a roughly 20% gain. That would be a reasonable success for the IPO.
There is, of course, a risk that SpaceX stock trades much higher than $163 out of the gate, pulling other space stocks with it. In that instance, AgentSmyth says to look at the short interest to identify potential short squeezes.
Short sellers borrow stocks they don't own and sell them, betting on price declines. Shares that are heavily shorted, which can be measured by looking at the amount of stock sold short relative to what's available to trade, are at risk of a squeeze when traders are forced to cover bets after a price increase, creating more buying demand that sends stock prices even higher.
Intuitive Machines, Redwire, and AST have short interests in the 20% range. That's about three to four times the short interest for an average stock in the Russell 1000. Rocket Lab's short interest is about 6%, close to the average.
Whatever happens on Friday, it will be fascinating and will impact stocks for weeks to come.
Write to Al Root at allen.root@dowjones.com
This content was created by Barron's, which is operated by Dow Jones & Co. Barron's is published independently from Dow Jones Newswires and The Wall Street Journal.
(END) Dow Jones Newswires
June 11, 2026 03:00 ET (07:00 GMT)
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