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

Original Author: Xu Chao

Original Source: Wall Street CN

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

Alexandra Mertz (online alias Tesla Boomer Mama), a prominent opinion leader in the Tesla community and former Wall Street analyst, recently held an in-depth discussion with host Herbert. Mertz believes that due to the extremely low initial free float rate (only 4.3%), SpaceX will likely experience an epic period of share scarcity in the early stages of its listing.

According to a Bloomberg report on Wednesday, calculations by index rebalancing forecaster Intropic show that since Nasdaq, FTSE Russell, and MSCI all plan to quickly include SpaceX in their indices, passive investors are expected to hold approximately 30% of SpaceX's outstanding shares just 15 trading days after listing. In contrast, had the previous slower inclusion rules been applied, 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 artificial intelligence, could form a self-reinforcing feedback loop, driving the stock price continuously higher.

Mertz believes investors need to closely watch two critical time points with high trading value: the peak passive buying triggered by the "official inclusion in the Nasdaq 100 on July 7," and the "period two days after the Q2 earnings call in the second half of July," which coincides with early shareholder lockup expirations and potential merger announcements. Behind this highly engineered IPO lies a vast capital chess game where Musk resolves his own $7 billion tax event and leverages Wall Street investment banks for interest exchanges.

Summary of Key Points

Nasdaq Inclusion Day, July 7: Nationwide passive fund building will directly collide with the historically lowest free float rate. Market estimates place the size of this passive buying between $8 billion and $18 billion (closer to $15 billion). Since old shareholders cannot sell their shares at this time, the market's free float will reach its lowest point.

Lockup Expiration Two Days After Q2 Earnings Call: While the initial unlock amount appears to be 30%, after deducting the absolute lockup period of 1 year for the 50% share held by Musk himself, the actual selling pressure is only 10%-15%.

"Merger of Equals" Hypothesis in July: 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 lockup expiration at the end of July is a highly clever capital script in line with Musk's style.

Wall Street Investment Banks' Interest Exchange: Schwab, Morgan Stanley, and JPMorgan, former institutional "adversaries" of Tesla, have rarely received substantial quotas of SpaceX IPO shares. This might be Musk's pre-arranged institutional "yes vote" locked in for the November shareholder meeting on the merger.

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

SpaceX (ticker symbol tentatively SPCX) is priced at $135 for this IPO, with an initial paper market value of $1.75 trillion. The planned issuance is 555 million shares of Class A common stock (approximately $7.5 billion in proceeds). As market subscription interest is already oversubscribed by up to 2x, underwriters will very likely fully exercise the "Greenshoe Option" (over-allotment option) within 30 days, increasing the total proceeds to $8.6 billion.

Despite the massive fundraising scale, the issued Class A shares account for only 4.3% of the total market cap. This means the free float of SpaceX in the initial stages of listing is extremely tight. SpaceX will face an intense period of share scarcity within the first 15 trading days post-IPO.

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

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

Market estimates place the size of this passive buying between $8 billion and $18 billion (closer to $15 billion). Since old shareholders cannot sell their shares at this time, the market's free float will reach its lowest point.

2. Precision "Lockup Expiration" Tied to Earnings Call: Selling Pressure Halved, $135 Forms a Solid Floor

Standard IPO lockup periods are usually a simple straight line (e.g., 180 days), but SpaceX's lockup expiration schedule is intricately linked to the Q2 earnings conference call.

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

Market rumors suggest that following the Q2 earnings call, early insider shareholders will face the first large-scale unlock of up to 30%, sparking panic over selling pressure.

But Alexandra clearly clarified in the discussion that analysts in the market have overlooked the core share structure: the majority (about 50%) of early insiders is Musk himself. And Musk, as the founder, has a strict 366-day lockup period for his shares.

Therefore, the potential new unlocked shares actually flowing to the public market two days after the Q2 earnings call are not 30%, but actually only 10% to 15%.

Furthermore, the will of early major shareholders is highly aligned:

Ron Baron has explicitly stated he "won't sell a single share, and will actually buy an additional $1 billion in the open market";

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

Although Ark Invest (ARC) will selectively sell old shares due to its 10% single-stock holding cap, it plans to increase its position in SpaceX through other newly opened funds.

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

Sharp money on Wall Street is connecting all the clues (Breadcrumbs). Alexandra points out that Musk faces a significant personal timeline: He must exercise the stock options from his 2018 Tesla compensation plan before August 15 this year, which will trigger a massive $7 billion personal tax event (due 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 share net settlement or collateral loans. This is not a trivial amount but a massive game involving tens of billions of dollars.

Therefore, the most plausible "Goldilocks scenario" hypothesis on Wall Street emerges clearly:

• Timing: During the power vacuum between the Nasdaq inclusion on July 7 (when SpaceX's stock is expected to more than double, pushing its market cap to a peak) and the lockup expiration at the end of July (when fresh shares flood in).
• Strategic Action: SpaceX and Tesla announce a Stock-for-Stock merger of equals.

This type of merger would automatically put the two companies' stocks into a perfect "lock step" state, driven by market arbitrage funds. By using positive news from one company to boost the other, the strategy of relying on "non-sellers" in the open market to inflate market caps would perfectly solve Musk's tax funding pressure.

4. Wall Street Investment Banks' "Political Arbitrage": Swapping IPO Perks for November Election Yes Votes

The biggest suspense in the merger script lies in the November shareholder vote.

According to Alexandra's precise calculations: After exercising options, Musk will have about 17.5% voting power in Tesla. Approving the merger requires an absolute majority of "50% plus one vote" of all outstanding shares, meaning Musk still needs to secure 32.5% more yes votes.

Currently, Tesla's retail shareholding has dropped from over half in the past to 31%, while institutional "Big Whales" have been on a crazy secret buying spree in Q1. To pass, support from big whales like Vanguard and BlackRock (holding over 15% combined) is necessary. BlackRock's CEO Larry Fink has already been mending relations with Musk at events like Davos. The institutional base (about 35%) seems initially secured. The remaining gap of 15% requires mobilizing half of the 31% retail investors.

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

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

In offering this "fat meat" to these three institutions, Musk's implicit leverage is: Take the SpaceX money, then manipulate your custodied shares to flip and vote "yes" for the merger at the November Tesla shareholder meeting.

Wall Street is profit-driven; in the face of enormous economic interests, they will unhesitatingly choose compromise.

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

Addressing technical questions from some investors, the interview provided answers with significant legal and corporate governance depth:

1. SpaceX doesn't have hundreds of billions in cash on its books. How can it complete the acquisition?

This is definitely not a cash deal but a 100% pure equity swap. SpaceX currently has an authorized share capital limit of up to 36 billion shares. After the IPO, it has only issued around 13 billion shares, giving it enormous capacity for further issuance. It can directly issue new shares in exchange for all Tesla shares.

2. Why can't Tesla acquire SpaceX instead?

Because SpaceX's S-1 prospectus establishes a perfect "founder's fortress of defense."

Musk suffered greatly during the Tesla era from short-sellers, activist investors, and Delaware judges. SpaceX's governance structure was meticulously fortified from the ground up:

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

Judicial Firewall: All shareholder lawsuits are forced into private arbitration, barring public court claims, effectively disarming malicious litigation lawyers;

Succession Clause: Even in the unfortunate event of Musk's death, the super control rights of his Class B shares will be directly transferred 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 safeguard 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 the assistance of AI.

Herbert:

Alright, welcome everyone, and thank you for joining us today. We are joined today by Alexandra Mertz, also known as Tesla Boomer Mama. I think this is going to be a very special episode where she shares the most authoritative guide to the SpaceX IPO. We'll also be sharing a few very important slides with everyone, and I'd like to give you a little preview now.

First, Alexandra has done a tremendous amount of work outlining the step-by-step process everyone can expect if a merger is announced. Then, she'll detail exactly what happens on IPO day, when the Nasdaq inclusion occurs, and when shareholders can be unlocked to sell. So, thank you so much for all this work, Alexandra. I know the IPO is this Friday, so many people have been asking about it. Tell us, what are you planning 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 exploring the idea of this merger. I am a firm believer in this merger. I want to start by saying that none of what follows constitutes financial advice.

But personally, I bought a significant number of call options for August this year because I firmly believe in this. I didn't participate in Tesla—correct, it's Tesla, I didn't participate in the SpaceX IPO because in my predicted scenario, the merger will be announced sometime in July or early August.

The timing of the SpaceX IPO now actually gives me a lot of confidence, which is why I wanted to do this episode. We've discussed before why this is very important for those investing in SpaceX, those staying in Tesla, and those investing in both. Because I think there are many key dates you absolutely must pay attention to, as SpaceX's stock price could bounce around wildly, and no one knows what will happen—not even Elon. So, Herbert, let's go slide by slide. Where do you want to start?

Herbert:

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

Alexandra:

Exactly. Aurelius read my article about the details of the SpaceX IPO, which is pinned to the top of my X (formerly Twitter) profile. You can go check it out, and 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 enlarge it a bit so everyone can see it clearly. Well, maybe they don't need to see us anymore, I don't know. Move it a little to the left if possible—I can't manipulate that. Okay, it all starts with the IPO this Friday, represented by the brown dot. The IPO price is at 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 continues until the Q2 earnings call, where they will get their first potentially large unlock, up to 30%. That's the blue line. I'll detail what happens after that a bit later. The green line below represents the demand from index funds buying