Elon Musk's IPO game
A master of attention
Last week we wrote about the coming IPO bonanza:
https://www.ecresearchgroup.com/p/ipos-are-for-the-insiders-to-get
The buzz hasn’t slowed. If anything, it’s getting louder.
SpaceX’s initial public offering (IPO) is scheduled for this Friday, June 12.
SpaceX small float
Most of the headline on the IPO has been around the initial valuation - $1.77 trillion.
A mind blowing valuation, potentially placing the company as the 8th largest publicly traded company in the world.
Here’s the part many non-professional investors skip right over: the size of the float.
SpaceX isn’t selling much of itself to the public. Not even close. And that single detail tells you almost everything about how this is designed to play out.
Trust me, Elon has engineered the entire aspects of SpaceX’s IPO.
It’s his master plan, and he is about to enter the history books as a result.
What is a float and how may it affect stock prices?
A float is simply the slice of a company’s shares that is actually available for the public to buy and sell.
Not every share trades publicly. Founders, early employees and insiders usually hold the bulk of the stock. Whatever is left over for everyone else is the float.
Here’s why it matters: when the float is small, a little bit of demand goes a long way.
Think of it like a neighborhood where only one house out of twenty ever comes up for sale. When a wave of buyers shows up at the same time, that single listing can get bid up far beyond what the home is really worth. Scarcity does the heavy lifting.
We’ve seen that during COVID.
Population migrations resulting in dramatic property price increases in Alberta and Maritimes.
A thin float works the same way. Small supply, the same demand to buy, and the price can shoot higher on relatively little money.
Much much higher.
Elon is a master of attention
Elon Musk understands something most CEOs miss: a stock price is also a marketing tool.
He knows that a pop in SpaceX’s share price on day one will generate massive media coverage, plus a frenzy across social media.
Free advertising, paid for by the crowd’s own excitement.
Now layer the numbers on top.
SpaceX is reportedly floating only about 5% of the company. The historic average for an IPO has been closer to 30%, according to Jay Ritter, a University of Florida professor.
Read that again. One sixth of the typical supply.
Then comes the second act: the lock up.
According to the company’s IPO prospectus, early investors will be allowed to sell up to 20% of their holdings beginning on the second full trading day after SpaceX reports its first earnings following the close of the second quarter. There’s a performance sweetener built in too. Investors can unload an additional 10% if the stock trades at least 30% above its IPO price on five of the ten trading days after that earnings release.
Source: https://global.morningstar.com/en-nd/stocks/how-spacexs-tiered-lockup-aims-help-post-ipo-trading
Read between the lines and the structure becomes obvious. A tiny float at the open creates instant scarcity. The staggered lock up keeps that scarcity going. The result is a feeding frenzy that runs from the IPO straight through to the first earnings report, right around the time many long time SpaceX investors finally get their chance to cash out.
For most non-professional investors, the playbook is predictable. They see the headline. They see the stock symbol flashing green. And they chase.
Green means GO, right?
We’ve seen this movie before:
In crypto.
In precious metals just a few months ago.
In meme stocks during the pandemic.
First Trillionaire in history
A $5 trillion valuation on IPO day? Jim Cramer, a CNBC talking head, claims that’s very possible.
SpaceX builds rockets. If SpaceX’s stock rockets to the moon, no pun intended, it would make Elon Musk the first trillionaire in history.
And that milestone is its own kind of rocket fuel.
A record breaking stock produces record breaking headlines. Record breaking headlines pull in more investors. More investors push the stock higher still. Around and around it goes, each turn feeding the next.
A trillion dollar man would be a global headline for weeks. Every one of those headlines is another invitation for the late crowd to pile in.
Whatever your thoughts about Elon Musk, and people have plenty, we all have to agree on one thing: when it comes to capturing attention, the man is a genius.
This coming week will be one for the history books.
If you like my work, I invite you to share it with others.
Eric Chang
Calgary, Alberta
June 9, 2026
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