Reasons to Avoid SPCX into the Quarter

Executive Summary — Updated August 4, 2026

SPCX reports its first quarterly results as a public company after the close today (August 4th) — and just two days later, on August 6th, roughly 911.5 million shares unlock for sale, a 1.5x increase to the current float. That combination of a high-stakes print and a massive supply event is the whole story heading into this week.

The IPO priced at $135. Looking at the ten largest U.S. IPOs since the Global Financial Crisis, the historical pattern is a strong first-day pop followed by a materially lower price six months out — on average, about a 21% decline. Applied to SPCX, that would put fair value near $106-107, and the stock has in fact been trading in that neighborhood, with a recent bounce around $108.69. The downward trend, however, remains the dominant one.

A common misconception is that SPCX is primarily a space-exploration play. Per the S-1, the $28.5 trillion total addressable market breaks down as:

Space and connectivity combined are only about 7% of the stated TAM.

Investors looking for pure-play space exposure are better served by names like LUNR, RDW, RKLB, or ASTS — most of which, notably, already do business with SPCX in some form, meaning owning them gets you tangential exposure to the actual space piece of SPCX's business anyway.

I know the bull case here:

SPCX is the only way to invest in "space" with an active satellite constellation attached to it, and that scarcity should command a premium.

I hear it, but I'm skeptical the market pays up for that when AI and compute are such an overwhelming share of the actual income statement. Until the space business shows a path to scale rather than a rounding error next to the data-center business, I don't think the premium materializes.

As a result of this perspective, I don’t see any diversification benefit to adding SPCX:

The S&P 500 held firm — unlike the QQQ — on an expedited path for SPCX. SPCX, like every other company, will need four consecutive quarters of GAAP-profitability. That doesn’t seem likely in the next 2-3 years.

Semis already carry a heavy weight in the S&P 500; you already have plenty AI exposure. If you have the QQQ, you have a piece anyway. By buying the name as it’s own line-item, you are choosing to go overweight SPCX and further overweight AI at a time where I am concerned most portfolios are over-exposed to the theme.

The only way to justify adding SPCX to a balanced, long-term portfolio (right now) is if you disagree with my assertion that SPCX will not trade on its [lacking] merits as “space business” or “unique asset”.

Earnings and the share unlock arrive in the same week

=

Real information risk paired with a structural supply shock

But it's worth being balanced here: I don't think the numbers themselves are actually what moves this stock. This is an Elon stock. It doesn't trade on fundamentals — it trades on broader sentiment and how the market feels about Elon at any given moment. Combine that lack of a fundamental anchor (no earnings) with the share unlock and a jobs report that could move yields in an already precarious rate environment, and you have a real threat for a name with no earnings track record to fall back on if sentiment turns.

So, even if the quarter is good and is initially bought… there are two potential landmines to reverse it.

That's exactly why I'm not getting ahead of this. I'll be waiting for the quarter, the lock-up, and payrolls before I look at this name again. Before signing off, here’s my take as a trader and investor:

As a trader, I know there is money to be made in this stock. I could see myself buying this stock if it dips to $90-95 and selling the recovery. The cult of Elon is strong. They have remained irrational longer than the institutions fighting TSLA at every corner could stay short. Need to give them credit where it is due.

Strong as the cult is, I don’t trust this small improvement in the technical situation. Today’s move can easily be attributed to a good day in the market: XLK (tech ETF) is up better than 3% as of 9:45AM (8/4/26).

As an investor, I can’t make a solid case — especially for anyone who own the QQQ, VOO, SPY, [name your favorite diversified index fund] — to get involved until the trading dynamics around the name change. Even if you aren’t in an index fund, we’re 3 years into this AI story. Chances are you have enough AI exposure as it is… and that is what SPCX offers right now. If you want exposure to space, there are better ways to get that exposure.