SpaceX stock has come under pressure in recent trading sessions, driven by a combination of factors including the unwind of the proxy trade and growing investor scrutiny ahead of its planned entry into major indexes. Shares fell despite a raft of bullish Wall Street ratings, suggesting broader market forces are outweighing analyst optimism.
Some analysts attribute the decline to the dissolution of the so-called SpaceX proxy trade — a strategy that had allowed investors to gain synthetic exposure to the private company. A Wall Street analyst noted that Tesla stock could rise 20% due to the potential for a SpaceX merger, adding another layer of uncertainty. Charter Communications (CHTR) has also been in focus as its recent SpaceX talks point to mobile bundling as a broadband defense.
Meanwhile, wealth managers report that clients are increasingly asking how to avoid owning SpaceX due to Elon Musk's polarizing reputation. Ellevest head of wealth management Emily Green noted that direct indexing is gaining traction as a way to exclude specific stocks, and cautioned that passive investors may not fully appreciate the changing index dynamics. The stock's drop comes even as a flood of bullish ratings from the Street suggests some see the selloff as an entry point.
Counter-argument: The sell-off may be overdone; bullish ratings and the potential for a merger with Tesla could create significant upside. The upcoming index inclusion could also drive forced buying by passive funds, supporting the stock.