Jim Cramer on SpaceX: “This Stock Is Now Hostage to the Mechanics of the Market”

Space Exploration Technologies Corp. (NASDAQ:SPCX) was among the stocks Jim Cramer commented on as he advised investors on how to take advantage of Wednesday’s market rotation. Cramer discussed the stock’s price action after its IPO, as he stated:

We saw a slower version of the same trajectory with SpaceX. Now, I was worried that the stock would spike to absurd levels right out of the gate, but it didn’t happen. I’ll tell you why. The underwriters did a great job of managing the deal. SpaceX came public at $135. It opened at $150; it finished at $161, just a little bit under that. But then it gradually charged up to $225 and change a few days later as memesters tried to walk it up in the middle of the night. I used to get up and watch it happen. Bunch of chuckleheads, thought they could manipulate… a trillion-dollar stock. No.

Since then, the stock’s given back most of its gains, and those gains were on very light volume. Regardless of how you feel about SpaceX, the business, or Elon Musk, the visionary, this stock is now hostage to the mechanics of the market, specifically the lockup on insider selling. Those shares will unlock gradually starting around the time of SpaceX’s first earnings report as a publicly traded company. If the stock reaches $175.50 by the time the earnings come out, which is up 30% from the offer price, well, that unlocks an additional tranche of stock. That’s what I’m worried about.

Space Exploration Technologies Corp. (NASDAQ:SPCX) manufactures and launches reusable spacecraft for orbital payloads and government missions, and provides satellite-based broadband internet. Additionally, it operates an artificial intelligence platform comprising computational infrastructure, user applications, and the X information network.

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