Michael Taylor examines why investors should pay close attention to the upcoming SpaceX IPO, even if they have no intention of buying the shares themselves. He explains how shifting market sentiment, AI spending and liquidity pressures could have wider implications across portfolios, from US tech giants to UK small caps.
We’re about to see history in the making.
The SpaceX IPO, which was valued at around 100x sales before the recent deals, is going ahead with a record allocation to retail.
You have to ask yourself… Why is this?
Institutions are typically not charitable. If there was money to be made, they’d likely make it for themselves and not be nice and let you make it.
Some have said to me: “Well, if you’re so sure, then you’ll be shorting it with max leverage then right?”
The short answer is no.
The long answer is that being flat is also a position.
People always assume that there are only two positions: long and short. But flat is a position in itself. Yes, there’s a small cost, in that the money is not being put to work anywhere, but if you have money within an ISA then it’s entirely possible you can be collecting interest on that capital.
But being flat gives you optionality.
You might pass on a trade and the money might be sitting in your account for several months, only for a solid asymmetric risk/reward trade to appear which you’ve got the funds to deploy.
The other issue with being short is that it’s not the same trade as being long.
The fundamentals of the trade are completely different.
For example, for a shorter to close, they need to buy the stock. And if there is buying pressure from actual buyers, we can see a short squeeze, which is where shorters rush to close their positions because they are taking on losses, and buyers are forcing the price higher (sometimes intentionally knowing shorters are seeing pain).
Long squeezes aren’t a thing.
There can also be a cost of holding a short.
For example, back in 2024 I posted a Reel saying I thought both Argo Blockchain and Petrofac wouldn’t be around in a year.
I was right – just. With Argo finally going in December 2025.
But at one point, I was being charged 180% a year on my Argo Blockchain short.
The maximum you can make on a short is 100%.
So obviously, holding the short for a year, even if the stock had gone to zero in that time, could easily have seen me lose money, despite being right.
There is talk of SpaceX’s fast track inclusion into the NASDAQ doing potential damage to the index and that ETF investors should be worried about this.
They don’t need to be.
SpaceX is only going to be a small portion of the index, but the real worry is that the SpaceX IPO hoovers a lot of cash out of the market and then starts dropping.
The most anticipated IPO in years doing badly will hit sentiment. That means people will start selling the most liquid names to take profits, or in a panic to be first out of the door. This is the real danger.
And it’s inevitable that UK small caps will be hit if that’s the case.
We’ve already seen Alphabet do an $85 billion capital raise to fund AI investment. This is because AI is expensive.
Meta is reportedly considering one too. There is some game theory here as if you grab the cash before it runs out, then that means there is less available for competitors.
But the reality is several of the Magnificent 7 have gone from capital light asset models with rock solid balance sheets, to heavy capex spenders in what appears to be a race at all costs to win with AI.
And if AI doesn’t deliver the productivity benefits promised, then the market is in trouble.
I would suggest you look across your account and make sure you don’t have any lazy longs. Make sure you know what levels you’re getting out at to take profits and where your stops are.
Set alerts below and above these points to track them effectively.
Just because you have no intention to trade SpaceX directly doesn’t mean that it won’t affect you.
If the market does end up taking a bath, then everything will be hit.
The best time to prepare is now.
I’ve done a 31-minute video on SpaceX with more detail here.
Michael Taylor
Get Michael’s trade ideas: https://newsletter.buythebullmarket.com/
This article is for educational purposes only. It is not a recommendation to buy or sell shares or other investments. Do your own research before buying or selling any investment or seek professional financial advice.
