Shares of Elon Musk’s SpaceX rose more than 10% in premarket trading on Tuesday, positioning the company to potentially surpass Amazon.com in market value and become the world’s fifth-largest company as it extended its post-IPO rally, News.Az reports, citing Reuters.

The stock was last up 10.4% at $212.50, more than 57% above its $135 IPO price, giving the company a market capitalization of nearly $2.8 trillion if gains are maintained. Amazon’s valuation currently stands at $2.66 trillion.

“We can say with certainty that this valuation makes absolutely no sense today. People are buying SpaceX in the expectation that others will buy too and push the price higher - that's speculation,” said Ipek Ozkardeskaya, senior market analyst at Swissquote Bank.

The company reported $18.67 billion in sales last year and a net loss of $4.94 billion after merging with xAI, which remains loss-making, in contrast to many major Wall Street technology firms that have posted strong earnings.

SpaceX options trading is expected to begin as early as Tuesday, with analysts warning that early activity could be heavy, volatile, and expensive.

Market analysts and portfolio managers said investors should prepare for volatility in the early stages of SpaceX’s public trading, citing its relatively small float and elevated valuation.

The rally may continue as SpaceX is expected to be fast-tracked for inclusion in the Nasdaq 100, which would make it a significant holding for passive funds and ETFs tracking the index, creating additional demand for its shares.

FTSE Russell and MSCI are also set to add the stock to their indexes on June 26 and June 29, respectively.

SpaceX also announced on Monday that its underwriters had exercised the “greenshoe” option to purchase additional shares, raising total proceeds from its initial public offering to $85.7 billion from the $75 billion raised last week.

More than $1.76 billion worth of SpaceX shares changed hands as of 05:02 a.m. ET, several times the trading volume of Nvidia, Microsoft, Tesla, and Apple combined.

Meanwhile, other major technology stocks, including Nvidia and Alphabet, traded slightly lower, while Tesla declined 1.5%.

News.Az 

By Nijat Babayev