SpaceX (NASDAQ: SPCX) has shed its post-IPO gains sharply, with the stock falling from a high of around $225 to a low of $147, trading in the $150s range.
Analyst and broadcaster Scott Melker described the price action as “the most telegraphed, predictable pump and dump situation in history,” pointing to structural features of the IPO that set the stage for the decline.
In the first four days of trading, there were effectively no sellers in the market, as early investors remained locked out and no options or short-selling mechanisms were available.
Melker explained that anyone who wanted exposure to SpaceX during that window “had to buy it on the market,” creating an artificial price surge driven entirely by retail demand with no counterbalancing supply.
That dynamic shifted decisively on June 16th, when options on the stock were launched, immediately enabling institutional players to short into the retail enthusiasm that had driven prices higher.
Melker drew a direct comparison to Bitcoin’s peak in December 2017, when the launch of futures contracts on the CBOE marked “the dead top of the Bitcoin cycle for years.”
He argued that the pattern is identical in both cases: once institutions gain the tools to short an asset, they move quickly to express the view that it is overvalued.
Adding further pressure to the stock is SpaceX’s decision to raise $25 billion in debt less than two weeks after its IPO, a move that surprised markets despite the offering being nearly four times oversubscribed, with $90 billion in demand reported.
Melker noted that while the appetite for the debt was clearly strong, “the market didn’t like that they were rushing to the market for cash so soon after the IPO,” creating a negative narrative around the company’s financial posture.
He also connected the debt issuance to similar moves by Robinhood and Alphabet, tying it to the broader convertible note and preferred debt strategies that have gained traction in markets, noting the situation creates “a massive sell off but a heavy thirst for this debt.”
The result is a stock under significant pressure from short sellers while the company’s underlying debt instruments attract strong institutional interest, a divergence that highlights the complexity of navigating newly public, high-profile listings.
