I did not purchase (yet) any Space-X shares. While I was VERY interested, the IPO price struck me as a bit high - albeit I could be totally out to lunch and have missed an opportunity. When I look at the week's prices for Space-X, I note SpaceX’s (SPCX) market debut has seen intense volatility, beginning with an IPO price of $135, an opening trade of $150, a climb during the week to a high of $225.64, and a subsequent correction to close yesterday at $154.59. While my recollection from decade of trading is that such post-IPO swings are not unusual, part of the Space-X correction may reflect the company’s recent (post IPO) announcement of a $20 billion bond issuance to refinance an existing bridge loan. While the need for this refinancing was disclosed in the IPO prospectus as part of the company's capital structure management, this detail of an upcoming refinancing, may have been overlooked by many market participants during the initial Space-X going public euphoria. I speculate another factor possibly driving the stock’s price swings is its relatively low initial public float of approximately 4%. The remaining 96% of shares are held by Elon Musk, major institutional investors, and employees who are subject to staggered, performance-based, and time-restricted lock-up periods that prevent the bulk of the company's equity from entering the market during these early stages. My speculative view is that we may see more share price volatility, with price support levels develop around $150/share, with the much less possible chance of a secondary floor (ie market support level) being tested at the $135 IPO price, should the stock face further downward pressure. Obviously, 100% speculation by myself.
