'Perfect for the internet': why SpaceX could become a 'meme' stock

SpaceX after the long-awaited initial public offering may be traded on the same principles as "meme" securities popular among retail investors, MarketWatch argues. Analysts surveyed by the publication warn of high volatility of shares of Elon Musk's company.

After SpaceX's IPO, which is expected to potentially take place in June, the company's stock could be volatile for a long time, MarketWatch writes. "I think quotes will fluctuate a lot," PitchBook analyst Franco Granda told the publication. According to him, the situation may become especially acute after the end of the so-called lockup period, when restrictions on stock sales by insiders and early investors are lifted.

SpaceX has the potential to become a "meme" stock, according to Angel Tengulov, professor of finance at the University of Kansas. Such securities are usually characterized by high trading volumes and sharp price fluctuations, often under the influence of social networks. Their dynamics are "disconnected" from business fundamentals and are determined by "speculative hype and the viral effect," which makes them risky, Tengulov explained. He called SpaceX a narrative company - that is, a company around which a strong story is built, such as the colonization of Mars. Such storytelling is "perfect for the Internet," he noted, comparing SpaceX to GameStop, an offline video game retailer whose stock is popular with retail investors from Reddit forums.

"SpaceX clearly has the right ingredients [to become a 'meme' stock]: a large-scale narrative, a founder with a loyal audience and a valuation largely based on future potential, not just current performance," Roundhill CEO Dave Mazza told MarketWatch. The fact that the company is going to allocate a significant stake to retail investors raises the likelihood of a "meme" dynamic post-listing, he said.

The securities of Elon Musk's other asset, Tesla, have also been called a "meme" in the past, MarketWatch recalls. "Volatility is the essence of Tesla. It always has been. And it will almost certainly be the same with SpaceX stock," the publication quotes investor and influencer Sawyer Merritt. He is known in social networks for his comments on Tesla, and regularly writes about the high volatility of quotes, attributing it to the activity of retail investors and the factor of popularity of the billionaire.

However, Zacks Investment Research strategist Andrew Rocco objects that SpaceX, like Tesla, is profitable, so it would not fully meet the definition of "meme" companies, among which this is rare. That said, he concedes that some investors may consider SpaceX's valuation to be excessive.

A deal to sell shares to insiders in December 2025 valued the company at about $800 billion. After that, according to PitchBook, SpaceX reported EBITDA of about $7.5 billion on revenue of about $16 billion. In February, after the merger with Musk-owned AI startup xAI, the value of the combined company could have been $1.25 trillion, but some investors considered that figure too conservative, Reuters writes. Now on the secondary market Nasdaq Private Market SpaceX is valued at about $1.54 trillion, the agency notes. Bloomberg reported that SpaceX is seeking a $2 trillion valuation in its IPO.

"SpaceX is consistently among the most actively traded companies on our platform because there's just nothing like it on the private markets today," Greg Martin, co-founder of Rainmaker Securities, a platform that intermediates the trading of private company stocks prior to public offerings, told Reuters. - Demand almost always outstrips supply, and that has persisted even during periods when secondary market activity has generally been more subdued."

Analysts note that the listing of SpaceX can both support and weaken investor interest in the space sector, which is already full of "meme" stocks, writes MarketWatch. For example, the Roundhill MEME ETF includes AST SpaceMobile, which promises to deliver internet from satellites directly to users' phones, but has not been profitable.

On the one hand, SpaceX's IPO could draw additional attention to the industry and increase trading activity and volatility in the stocks of other space players - investors will be looking for "related" ideas, said Mazza of Roundhill. On the other hand, Musk's company could draw institutional capital and investor interest that would otherwise go to smaller companies popular with retail traders.

A placement of that size could prompt the market to sell some shares of even tech giants, CNBC admits.

"Investors evaluating the SpaceX IPO are focusing on the rocket business and Starlink subscribers," Deepwater Asset Management managing partner Gene Munster wrote on social media X, "But they're missing the point. SpaceX, through an ecosystem of companies controlled by Elon Musk, has quietly assembled the only set of assets capable of creating a fully sovereign AI."

By this term, the analyst means an end-to-end AI system, fully controlled by one company and not dependent on external suppliers at any level. According to Munster, SpaceX is capable of realizing such a model - and this could be its key competitive advantage, writes Business Insider.

This article was AI-translated and verified by a human editor