SpaceX IPO Trading Core Window: July 7 Nasdaq Inclusion Date and Post-Q2 Earnings Lock-Up Expiry

Original Author: Xu Chao

Source: Wall Street News

SpaceX is about to have its historic IPO this Friday, with the offering price set at $135 and an initial paper market cap of $1.75 trillion. As a super unicorn of rare scale in Wall Street history, the trajectory of its stock price post-listing and the game of chips have sparked fervent attention from global investors.

Alexandra Mertz (known online as Tesla Boomer Mama), a well-known opinion leader in the Tesla community and former Wall Street analyst, recently had an in-depth conversation with host Herbert. Mertz believes that due to an extremely low initial free float (only 4.3%), SpaceX could experience an unprecedented vacuum of available shares in the early stages of trading after the IPO.

According to a Bloomberg report on Wednesday, index rebalancing forecaster Intropic estimates that because Nasdaq, FTSE Russell, and MSCI all plan to fast-track SpaceX into their indices, passive investors are expected to hold approximately 30% of SpaceX's outstanding shares just 15 trading days after the listing. In contrast, under the previous, slower inclusion rules, this proportion would have been only about 4%.

Academics and market observers warn that this scale of mechanical demand, combined with market frenzy over Musk, SpaceX, and AI, could form a self-reinforcing feedback loop, pushing the stock price continuously higher.

Mertz believes investors need to keep a close watch on two critical, tradable inflection points: the peak of passive buying induced by the official inclusion in the NASDAQ-100 on July 7, and the convergence period in the second half of July, two days after the Q2 earnings call, when early shareholder lockups expire and potential merger announcements coincide. Hidden behind this meticulously engineered IPO is Musk's vast capital chess game, involving solving his own $7 billion tax event and using Wall Street investment banks for quid pro quo exchanges.

Key Takeaways

July 7 Inclusion in Nasdaq: Nationwide passive fund buying will collide head-on with historically low free float. Market estimates for this passive buying range from $8 billion to $18 billion (closer to $15 billion). Since existing shareholders cannot sell at this time, market free float drops to its lowest point.

Lockup Expiry Two Days After Q2 Earnings: The initial unlock amount appears to be 30%, but after deducting Musk's personal 50% stake, which is under a 366-day absolute lockup, the actual selling pressure is only 10%-15%.

The July "Merger of Equals" Theory: Musk faces a $7 billion tax liability from exercising Tesla options before August 15. Announcing a "stock-for-stock" merger of equals between the two companies between the peak of SpaceX's stock price on July 7 and the end of July lockup expiry is a highly clever capital maneuver, consistent with Musk's style.

Wall Street's Quid Pro Quo: Schwab, Morgan Stanley, and JPMorgan, former institutional "adversaries" of Tesla, have rarely been allocated choice pieces of the SpaceX IPO pie. This could be Musk's way of preemptively securing institutional "yes" votes for the merger vote at the November shareholder meeting.

1. Extremely Low Free Float (4.3%): Grok Model Predicts Stock Price Could Double by July 7

SpaceX (ticker symbol tentatively SPCX) has priced its IPO at $135, with an initial paper market cap of $1.75 trillion. The planned issuance is 555 million Class A common shares (approximately $7.5 billion in raised funds). As market subscription intentions are already oversubscribed by 2 times, the underwriters are highly likely to fully exercise the "Greenshoe option" (over-allotment option) within 30 days, raising the total fundraising to $8.6 billion.

Despite the large scale of fundraising, the issued Class A shares represent only 4.3% of the total market cap. This means the free float for SpaceX in the early stages of listing is extremely tight, leading to a strong vacuum of available shares in the first 15 trading days post-IPO.

First Key Date: July 7 This is the first trading day after the Independence Day weekend and the 15th trading day after the IPO, when the NASDAQ-100 index will officially include SpaceX.

At that time, major index funds like Vanguard CRSP and FTSE Russell must passively build positions in the open market unconditionally, based on a float-adjusted mechanism.

Market estimates for this passive buying range from $8 billion to $18 billion (closer to $15 billion). Since existing shareholders cannot sell at this time, market free float drops to its lowest point.

2. The "Precision Unlock" Tied to Earnings: Halved Selling Pressure, $135 Forms Strong Support Level

Conventional IPO lockups are usually a simple blanket period (e.g., 180 days), but SpaceX's lockup expiry schedule is precisely tied to the Q2 earnings call.

Second Key Date: Two Business Days After Q2 Earnings Call (Estimated around July 22 or 29)

Market rumor suggests that after the Q2 earnings call, early insider shareholders will face the first large-scale unlocking of up to 30%, triggering panic about selling pressure in the market.

But Alexandra clearly clarified in the conversation that market analysts are overlooking the core shareholding structure: Among the early insider shareholders, the largest portion (about 50%) is Musk himself. As the founder, Musk's shares are subject to a strict 366-day lockup period.

Therefore, two days after the Q2 earnings call, the actual new unlocked shares potentially flowing to the open market are not 30%, but effectively only 10% to 15%.

Furthermore, the intentions of early large shareholders are highly aligned:

Ron Baron has explicitly stated he "won't sell a single share and plans to buy another $1 billion in the open market";

BlackRock has publicly expressed a strong intention to buy $5 billion to $10 billion worth at the IPO, exceeding the readily available supply in the market;

Ark Invest (ARC), while limited by a 10% single-stock holding cap and thus may selectively sell some older shares, plans to add SpaceX to its other new open funds.

3. The July "Goldilocks" Scenario: The $7 Billion Tax Event and the "Merger of Equals" Hypothesis

Astute capital on Wall Street is connecting all the breadcrumbs. Alexandra points out that Musk faces a major personal timeline: He must exercise his stock options from the 2018 Tesla compensation plan before August 15 of this year. This will trigger a massive personal tax event of up to $7 billion (due for tax payment in January 2028).

In the days leading up to and including the option exercise on August 15, the higher Tesla's stock price, the more favorable it is for Musk's personal net share settlement or pledge financing. This is not small change; it's a massive game involving tens of billions of dollars.

Therefore, Wall Street's most plausible "Goldilocks scenario" hypothesis emerges:

• Timing: During the power vacuum between the completion of the NASDAQ inclusion on July 7 (when SpaceX's stock price is likely more than double, pushing market cap to a peak) and the end-of-July lockup expiry (when new shares flood in).
• Strategic Move: SpaceX and Tesla announce a Stock-for-Stock Merger of Equals.

Such a merger would force the two companies' stock prices into a perfectly synchronized "lock step" driven by market arbitrage funds. By leveraging positive news from both companies and allowing the "non-sellers" in the open market to boost market caps, this strategy would perfectly solve Musk's tax funding pressure.

4. Wall Street's "Political Arbitrage": Trading IPO Fat for 'Yes' Votes in the November Vote

The biggest suspense for the merger scenario lies in the November shareholder vote.

According to Alexandra's precise calculation: After exercising his options, Musk would hold about 17.5% voting power in Tesla. Passing the merger requires an absolute majority of "50% plus 1 vote" of all outstanding shares. This means Musk needs to secure an additional 32.5% of the 'yes' votes.

Currently, Tesla's retail shareholder proportion has dropped from over half historically to 31%. Institutional whales have been aggressively accumulating shares in Q1. To get the deal through, support from big whales like Vanguard and BlackRock (together holding over 15%) is crucial. BlackRock CEO Larry Fink has already been mending relations with Musk at venues like the Davos Forum, and the institutional voting base (about 35%) seems preliminarily secured. To fill the remaining ~15% gap, roughly half of the 31% retail investors need to be mobilized.

Intriguingly, SpaceX's IPO has unusually included Charles Schwab, Morgan Stanley, and JPMorgan Chase as core underwriters and distributors. These three institutions were leading "adversaries" who voted against Musk in past Tesla compensation and Texas relocation cases:

Wall Street's Political Bet: As one of the most profitable and prestigious IPO allocations in Wall Street history, no investment bank can resist the billions in fees and client prestige.

By giving this "fat piece" to these three institutions, Musk's implicit leverage is: Take the SpaceX money, and you must swing the votes of your custodial shares to 'yes' for the merger at the November Tesla shareholder meeting.

Wall Street is profit-driven. Faced with immense economic benefits, they will not hesitate to compromise.

5. "The Perfect Fortress": Why Must It Be SpaceX Acquiring Tesla?

Addressing technical questions from some investors, the interview provides an answer with deep legal and corporate governance insights:

1. How can SpaceX complete the acquisition without hundreds of billions in cash on its books?

This is definitely not a cash deal, but 100% pure equity swap. SpaceX's current authorized share limit is up to 36 billion shares. Post-IPO, only about 13 billion will be outstanding, leaving an enormous capacity for new issuance. It can directly issue new shares in exchange for all of Tesla's shares.

2. Why can't Tesla be the one to acquire SpaceX in reverse?

Because SpaceX's S-1 prospectus establishes a perfect "Founder's Defense Fortress".

Musk suffered greatly from malicious short sellers, activist investors, and Delaware judges during the Tesla era. SpaceX's governance architecture was built from the ground up with strict safeguards:

Super Voting Rights: SpaceX's Class B shares carry 10x super voting rights, with 97% firmly controlled by Musk himself;

Judicial Firewall: All shareholder lawsuits are mandatorily forced into private arbitration and cannot be brought in public courts, directly neutralizing the weapons of frivolous litigation lawyers;

Succession Clause: Even if Musk unfortunately passes away, the super control rights of his Class B shares will be transferred directly to his family.

Tesla's current governance structure has inherent flaws, preventing Musk from achieving absolute control. Therefore, only by integrating Tesla entirely under SpaceX's legal framework can Musk permanently protect his absolute control over the entire business empire, shielding it from activist investors and local courts.

Below is the full text of the interview, translated with AI assistance.

Herbert:

Alright, welcome everyone, thank you for joining us today. We are joined today by Alexandra Mertz, also known as Tesla Boomer Mama. I think this will be a very special episode where she will share the most authoritative guide on the SpaceX IPO. We'll also share a couple of very important slides with everyone, and I want to give you a little teaser now.

First, Alexandra has done a tremendous amount of work. She has laid out, step-by-step, what everyone can expect if a merger is announced. Then, she goes into detail, step-by-step, explaining what happens on the IPO day, when the Nasdaq inclusion occurs, and when shareholders can unlock and sell. So, thank you for all this work, Alexandra. I know the IPO is this Friday, so a lot of people have been asking about it. Tell us, what are you going to share with us today?

Alexandra:

Hi, Herbert, thank you for having me. Well, it all started with — I mean, obviously for weeks and months, we've been discussing the idea of the merger. I'm a firm believer in this merger. I want to start by saying that nothing in the following is financial advice.

But personally, I bought quite a few call options for August because I firmly believe in this. I didn't participate in Tesla — well, yes, Tesla, I did not participate in the SpaceX IPO because, in my predicted scenario, the merger will be announced sometime in July or early August this year.

The timing of the SpaceX IPO now actually gives me a lot of confidence, and that's why I wanted to do this show. We've discussed before why this is important for those investing in SpaceX, those staying in Tesla, and those invested in both. Because I think there are many key dates you absolutely must pay attention to. The SpaceX stock price could jump around wildly. Nobody knows what will happen, not even Elon. So, Herbert, let's go through it slide by slide. Which one do you want to start with?

Herbert:

Yes, this one looks like the most important. First of all, thanks to Aurelius for putting this together, right?

Alexandra:

Exactly. Aurelius read my article about the details of the SpaceX IPO, which is pinned on my X profile. Everyone can go there and look. Then you'll see his comment below, saying, "I fed all your data into Grok."

Then Grok gave me this chart, which is highly interesting. You might need to zoom in a bit so everyone can see it clearly. But, well, maybe they don't need to see us anymore, I don't know. Move it a bit to the left, if possible, to the left — I can't manipulate that. Ok. It all starts with the IPO this Friday, that's the brown dot. The IPO price is $135, that's the inverted brown square, right.

Then you see this blue line, representing that early investors currently can't sell. As you can see, this lasts until the Q2 earnings call, where they will get their first potentially massive unlock, up to 30%. That's the blue line. I'll explain in detail what happens after that later. The green line below shows the