It points to the US offering major concessions in what will be another TACO moment.
And if so, you have to wonder what was the point of the war then? 105 days. All just so that we return back to the same kind of arrangements that were in place on 27 February before this all started. So much winning.
In any case, markets are taking things in stride and feeling more optimistic about the whole thing. Oil prices are down while equities are looking up and set to end the week strong.
S&P 500 futures are up 0.6% with Nasdaq futures up 0.5% on the day currently. For Wall Street, pricing in the TACO trade is not the only game in town today. All eyes are on SpaceX as shares are set to make its public trading debut on its IPO, with price set at $135 per share.
This will be the biggest-ever IPO, with it raising a record $75 billion on the sale of 555.56 million shares. That puts the value of SpaceX at a whopping $1.77 trillion and will rank seventh among US-listed firms when its shares begin trading on the Nasdaq today.
There’s a lot of emphasis placed on retail trading here with SpaceX deciding to set aside 30% of shares for retail buyers. That is a much larger number than it would be typically (around 5% to 10%).
So, that will definitely keep things interesting as retail buyers are more indifferent to the pricing and have been prone to try and “flip” shares upon IPO rather hastily. Hence, that is why they typically get lower allocations.
However, just keep in mind that we are seeing major retail brokerages that are participating in this IPO implement some stricter rules this time around.
Fidelity is enforcing a 15-day holding period on SpaceX shares but with rather harsh penalties. A first violation of the share flipping restriction will trigger a 6-month ban from future IPO allocations at the brokerage. Then, a second violation would lead to a 1-year suspension.
And many other brokerages are also doing the same, including the likes of SoFi and Robinhood.
So, just be wary of that when reading into the price action of the SpaceX “launch” today. It is clear that retail investors are buying and they are going to have a big slice of the pie to bite at.
As such, the question may not necessarily be how SpaceX shares fare today but rather how it will really hold up in the weeks ahead
