(If you’re Canadian, and as embarrassed as I am today for being one, it’s time to check-out Ready.ca, if you haven’t already).
Hello all,
The Space-X IPO is here, and it’s a bit of a mixed bag on how to play this.
In the run-up to this day, I posited a “pop-and-drop” dynamic, where the most anticipated IPO in history may signal an interim top for the technology space (similar to the Coinbase IPO that set off the crypto winter of 2021-2022).
It doesn’t look as simple this time. There was not much of a parabolic run ahead of this day, in fact, markets tanked pretty hard ahead of the event. Right now were are up on the day so far.
The sticker price on SPCX is $135/share – giving it a $1.7 trillion valuation, but so far I have not yet seen a trade hit the tape. When I logged into my Questrade account I received a notice that they were rejecting all market orders for SPCX today, limit orders only.
So… the question is what to do about our “back door” plays into SPCX?
Stack Capital:
Down over 12% on the day, but looking like it’s already oversold.
We’re up about 27% from our entry a couple months ago – I wouldn’t fault anyone for taking profits here.
But what I’d do instead is this:
- Mental stop-loss around $25 on a closing basis (let’s see where we finish)
- If we reverse higher after this, take some profits somewhere around the previous highs ($34)
Stack also owns pre-IPO shares in OpenAI (not as much as Space-X), Coreweave, Databricks and Shield, so it really is a nice little treasure chest of pre-IPO companies right in the thick of the Post-Singularity Stack.
Neptune Digital has not really moved on their Space-X stake at all, we removed them from the portfolio some time ago, I wouldn’t fault anyone for cashing this one out. I may finally do that.
Scottish Mortgage Trust – not happy that I was unable to purchase it within my RRSPs, but exhibiting the same pattern as Stack Capital: it looks oversold.
So maybe this SpaceX IPO, instead of “ringing the bell at the top”, is actually sounding the starting gun for the Space Age trade and “The Moonshot Economy”, for lack of a better term for it.
Actions:
- Protect STCK gains with a stop loss
- Wait to see where STCK and STM bottom before adding more
- Pull the pin on NDA if you’re still holding.
- Watch SPCX. Do not chase it (unless it absolutely tanks to a sub-trillion dollar market cap. Then buy some).
While I’m here – it really looks to me like Bitcoin is bottoming. We’re seeing all the markers and I’ll have much more to say about it in the next edition.
If I had to guess, I’d say the absolute lowest Bitcoin could go is perhaps $54K, but any dips below the $60K handle are bought fairly aggressively and don’t last.
We’ve been buying more BTC on the open market over the last week, also adding more NEAR on any dips below $2 (or close to it).
The new Sovereign Capitalist website is coming along splendidly – you can see a couple public pieces we published there:
- The increasing gap between global debt and equity (with the live artifact I mentioned last newsletter)
- The Strategy liquidation modeler – live artifact, showing you exactly how inane the various calls for MSTR’s “liquidation number” really are.
All kinds of great stuff coming along in the new dashboard.
The next edition will be out…sometime over the week of June 29th (possibly the weekend of the 27th-28th),
