I’ll admit it.
I was nervous.
Not because I thought SpaceX (SPCX) was a bad company. Quite the opposite.
I’ve spent months writing about how historically significant this company is and how difficult it is to find a proper comparison.
What I wasn’t sure about was the mechanics.
This wasn’t just another IPO. It was the largest IPO in history.
SpaceX raised $75 billion, debuted at a valuation of roughly $1.77 trillion, and finished its first day of trading with a market capitalization above $2.1 trillion.
That makes it the sixth-largest company in the United States, ahead of names like Broadcom (AVGO), Tesla (TSLA), Meta Platforms (META), and Berkshire Hathaway (BRK.B).
The stock opened strong and closed nearly 20% above its offering price.
Trading was equally impressive. More than 520 million shares changed hands on the first day, nearly matching the total number of shares issued.
That’s about as close to a perfect outcome as anyone could have hoped for.
The banks did their job. The exchanges did their job.
The market makers did their job. The regulators did their job.
Most importantly, investors got a functioning market.
Everybody won.
Everything That Could Have Gone Wrong
Think about the list of things that didn’t happen.
The IPO could have been priced too aggressively and immediately collapsed.
It could have opened 50% higher, creating chaos and leaving billions, if not trillions, of dollars on the table.
The exchange could have struggled to match orders.
Retail investors could have been locked out.
Liquidity could have dried up.
The entire thing could have become a circus.
Instead, we got something remarkably boring.
And that’s a compliment.
The stock opened around 11% above the offering price, traded throughout the day, and finished with a healthy first-day gain.
There were no major technical failures. No exchange disasters. No headlines about broken markets. No panic.
When you’re dealing with the biggest IPO ever, boring is beautiful.
Wall Street deserves a lot of credit here.
The cynics will never admit it, but coordinating an offering of this size requires thousands of people working together behind the scenes.
Investment banks, brokers, exchanges, regulators, custodians, market makers and institutional investors all had to execute nearly flawlessly.
For one day at least, they did.
The Real Test Starts Now
Now comes the part that actually matters.
Supply.
The first day of trading was only the opening ceremony.
The real question is what happens as more stock becomes available for sale.
Unlike a traditional IPO that dumps a giant wave of insider shares on the market six months later, SpaceX implemented a staggered lockup schedule designed to spread out selling pressure.
Eligible holders can sell portions of their shares after roughly 70, 90, 105, 120, and 135 days following the IPO.
Another large tranche becomes available after third-quarter earnings, with the remainder unlocking around 180 days after the offering.
Elon Musk and certain large shareholders are subject to a much longer lockup period of approximately one year.
That means investors should be watching the calendar. The first meaningful supply events begin arriving in August.
More stock becomes available throughout September, October and November.
Then comes the larger unlocks around earnings season and year-end.
This is where we’ll learn what the true demand looks like.
Everybody wanted the stock when there wasn’t much available. That’s easy.
The harder question is whether buyers remain just as enthusiastic when billions of dollars worth of shares become eligible for sale.
We’ll find out soon enough.
For now, though, Wall Street earned an A+.
The largest IPO in history came and went without a hitch.
Considering all the things that could have gone wrong, that’s an accomplishment worth recognizing.
The Genesis Line
Now that the IPO is behind us, we can get back to what actually pays: following the trend.
For me, the most important level on the chart right now is the anchored volume-weighted average price from the very first trade.
What some technicians call the AVWAP, I call this particular version of it the “Genesis Line.”
It’s the average price paid by every participant since the stock began trading. As of Friday’s close, that number sits right around $163.
As long as SpaceX can get and stay above that level, it’s hard for me to make a bearish argument. The stock is in an uptrend. Buyers are in control, and the path of least resistance remains higher in that scenario.
My concerns begin if prices start getting comfortable below that Genesis Line.
The good news is that every major charting platform now includes Anchored VWAP tools, so anyone can follow along.
We’ll be discussing it during The Primary Trend today, and we’ll continue monitoring it as additional data comes in over the weeks and months ahead.
One of the things I’ve learned studying post-IPO behavior over the years is that the truly catastrophic declines rarely begin while a stock is trading above its Genesis Line.
The biggest disasters of the past two decades occurred after prices lost that level and failed to reclaim it.
That’s why I think this line matters.
Even if you’re not trading SpaceX, the implications go well beyond a single stock.
This is a behemoth. One of the largest companies in America from the moment it became public.
How SpaceX behaves from here will influence the next wave of IPOs. Investment bankers, venture capital firms, private companies and institutional investors are all watching the same thing we are.
After Friday’s success, it’s hard to imagine the IPO pipeline staying quiet for very long.
Expect more supply to hit the market. Expect more giant offerings.
Expect more companies to take advantage of what appears to be a very healthy appetite for new issuance.
And we’ll be right here talking about all of it.
Stay sharp,
JC Parets, CMT
Founder, TrendLabs