The editors of this news service have also written about the SpaceX IPO as a major liquidity event, and in coming weeks we are talking to wealth advisors about what sort of advice they give to newly enriched individuals, including what this means for philanthropy planning and wealth transfer. When such a major financial event takes place, it causes a wide variety of conversations.

To address the specifics of the liquidity issue is Arthur Azizov , chief executive and founder of B2BROKER Group and B2BINPAY. 

The editors are, as ever, pleased to share this content and stimulate discussion. The usual disclaimers apply to views of guest writers. To comment, email tom.burroughes@wealthbriefing.com and amanda.cheesley@clearviewpublishing.com

Arthur Azizov

SpaceX, a company that has recently gone through a very high-profile and successful IPO, is a substantial business with leading positions in aerospace and satellite communications, as well as ambitions in AI infrastructure and adjacent spaces. Yet, after the IPO, less than 5 per cent of its shares became available for public trading. Moreover, the share price moved sharply in both directions during the first weeks and even now remains volatile, despite the fact that the underlying business hasn’t changed at anything close to the same speed.

So, if in early June the primary question investors asked was, “Can I get a piece of it?”, now, it’s time for wealth advisors to answer a different one: what kind of market are these investors actually entering if they decide to buy SpaceX shares? A company can justify long-term belief and still be difficult to buy at a sensible price or exit on the client’s own terms. Let’s elaborate on this.

A trillion-dollar company can still be an illiquid stock
When people hear “SpaceX,” they think of a company worth more than $2 trillion. What they may not fully understand, though, is why a business of this size can still behave like a narrow, unstable market. The reason is that capitalization and liquidity aren’t the same thing.

SpaceX may be expensive, still investors can trade only the portion actually available to the public. Even after the underwriters exercised their option to purchase additional shares, the public float remained below 5 per cent. For comparison, the average IPO float since 1980 has been around 30 per cent.

This directly changes the stock’s behavior. When so few shares are available, even a relatively limited wave of buying can absorb supply and push the price higher, and, if demand weakens, the same market could sharply turn in the opposite direction.

The first weeks of SpaceX’s stocks trading showed exactly this. It moved far above its IPO price and then gave back a large part of the gains, while the underlying business changed very little in the same period. Was the price simply artificially inflated? I’d say no.

The more convincing explanation is that the balance between buyers and sellers had an unusually strong influence on it.

I think this is the key point out of this story that advisors should keep in mind. A company may be large, mature, and strategically important, while the public market for its shares stays young, concentrated, and relatively illiquid.

“Must-own” demand distorts price discovery
Limited supply explains why SpaceX’s stock price can move sharply. Even so, it doesn’t fully explain why demand became so strong.

Basically, not all buyers thoroughly analyze SpaceX in terms of revenue, margins, and capital requirements. For many investors, the company is the embodiment of Elon Musk, commercial space, Starlink, defense contracts, AI ambitions, and a rare chance to own a business that has been private for many years. This makes it almost iconic, thus, a “must-own” name for the portfolio.

I can’t say this kind of demand is meaningless or entirely irrational, as cultural relevance can indeed support a stock for a long time. Still, when investors treat popularity as proof that any price is justified, it’s a problem.

Additionally, SpaceX is set to join the Nasdaq-100, which JP Morgan estimates could bring about $4.3 billion in passive inflows. This means that funds tracking the index will inevitably need to buy the shares regardless of the strength of the company’s fundamentals. A rising price may also force some short sellers to close their positions, which could add even more demand.

So, when private investors want to own a stock, passive funds have to buy it, and short sellers may be forced to cover; price discovery becomes lopsided. This is why advisors may treat cultural relevance as a real market force, but definitely not as evidence that the valuation is safe.

Three liquidity questions advisors should ask before clients buy
Given the context, it’s not necessary for wealth advisors to discourage clients from buying SpaceX. Instead, they should carefully analyze the stock and ask three preliminary questions.

How much of the company is actually tradable?
The total number of outstanding shares tells advisors little about the market their clients will enter. What makes more sense is the effective free float, how concentrated ownership remains, and if existing holders are currently allowed to sell. A small tradable portion can exacerbate both confidence and fear.

Who will have to buy, and who may soon be free to sell? 

At the moment, index-tracking funds have to buy SpaceX shares, yet later, insiders and early investors will gradually receive permission to sell under the company’s staged lock-up scheme. Therefore, advisors should understand not only who wants to acquire the stock today, but who may enter or leave the market in several months.

How long does the client actually plan to hold?
A client prepared to hold SpaceX for five years may reasonably focus on Starlink, launch leadership, and future revenue. Meanwhile, someone expecting a quick return after the IPO is taking a different position. In practice, this type of client is trading free float, index flows, lock-up releases, and market sentiment.

All of this means that the same stock can be both a long-term investment for one client and a liquidity trade for another, which is why advisors need to make clear which one the client is actually buying.

Bottom line
All in all, SpaceX has perfectly shown that public markets are ready to accept trillion-dollar IPOs, which gives its successors such as OpenAI, Anthropic, a compelling role model for aggressive pricing. Still, it has also shown why the first weeks of trading shouldn’t be treated as proof of fair value.

In my view, SpaceX isn’t a classic bubble. Rather, it’s a fundamentally strong company trading through a structure that can produce bubble-like pricing.

That’s why advisors should separate the quality of the business from the quality of the market around its shares. Their key role is to prevent clients from confusing scarcity with safety, popularity with price discipline, market capitalization with a reliable exit route.