SpaceX gains a second day as leveraged ETFs flood market

SPCX opened on June 12 at $135 and raised about $75 billion in the largest U.S. initial public offering on record. The deal drew roughly $250 billion of orders and was about 3.5 times oversubscribed before pricing. The stock closed its first trading day at $160.95, then climbed toward $192 on the second session, leaving a two-day gain near 32% and pushing the company’s market capitalization above $2.5 trillion. At the opening, the debut had valued SpaceX near $2.3 trillion.

ETF issuers listed a wave of products tied to SPCX as trading began. GraniteShares introduced a 2x Long SpaceX Daily ETF (SPAL) and a 2x Short (SNK), while Defiance launched a 2x long fund (SPCU) the same day. ProShares, Direxion and Leverage Shares had filed related products earlier. About 11 leveraged SpaceX ETFs became tradable within the first half hour of market trading, generating roughly $119 million in volume in that window. Defiance’s SPCL drew about $10 million of first-day volume and rose roughly 46% before SPCX started trading.

GraniteShares’ SPAL carries a net expense ratio of 1.50% and resets exposure daily, which the issuer describes as making it a short-term trading vehicle rather than a buy-and-hold option. Single-stock leveraged ETFs apply leverage to daily returns and use daily compounding. Those mechanics can cause fund returns to diverge from the stock’s performance over longer periods and can amplify losses if SPCX declines, a risk that could increase as more shares enter the market.

Asset managers with prior private positions converted paper holdings into public shares around the debut. ARK Invest reported holdings of SPCX across four active ETFs — ARKX, ARKQ, ARKK and ARKW — after first investing through its private ARK Venture Fund in 2023. The firm acquired about 3.3 million shares worth roughly $444 million around the debut, and SpaceX represented 11.38% of the Venture Fund’s net assets at the end of May. ARK wrote that it initiated the position in 2023 and that “For ARK, this moment has been years in the making.”

The size of the order book and the trading volume tied to SpaceX ETFs have drawn attention from traders and analysts. One market observer estimated SpaceX added roughly $420 billion to its market capitalization on the day the stock closed up about 19.6%. Upcoming sessions will show whether buying pressure continues or whether leveraged products amplify any pullback.