Latest / Bull Market Conversations with Fexingo: Rallies, Momentum, and Riding Market Strength / How SpaceX IPO Is Reshaping Retail Investing in 2026
Transcript
- Lucas: Luna, I want to talk about the biggest IPO story of the year, maybe the decade — SpaceX. They're raising $75 billion in their offering, and prediction markets are saying they could close above a $2 trillion market cap on day one. Luna: Yeah, I've been watching that. But what I find really interesting is the retail allocation — only about 20% of the shares going to individual investors, according to the latest headlines. Lucas: Exactly. That's down from what was initially expected, and it tells you something about how the company views the retail crowd versus institutional demand. But the frenzy is real. I mean, this is a company that was a startup not that long ago, and now it's potentially the most valuable company in the world. Luna: Well, let's put that in context. The S&P 500 is at 7,394, up about 0.1% this week. The NASDAQ is at 25,810, up 0.4%. But if you look at growth ETFs like IWF or VUG, they're down nearly 1% over the same five days. So there's this weird disconnect — the broader market is grinding higher, but high-growth names are getting hit. Lucas: Right. And that's where SpaceX fits in. It's a high-growth story — space launches, Starlink, the whole ecosystem — but it's coming public at a time when growth stocks are out of favor. Cloudflare dropped over 9% this week. Palantir fell 3.3%. Even Datadog was flat. So the question is: will SpaceX defy the rotation, or is it a sign that growth is finally back? Luna: I think it's more about demand. The SpaceX IPO is a once-in-a-generation event. Retail investors are clamoring for shares, but they're getting squeezed. The company cut the retail allocation to the low 20% range, which means institutions are getting the lion's share. That's a pattern we saw with other big tech IPOs, but the scale here is different. Lucas: Let's talk about that scale. $75 billion raised. That's almost as much as the entire GDP of some small countries. And the valuation talk — $2 trillion on debut. For comparison, the entire Russell 2000 index of small-cap stocks has a market cap of about $2.9 trillion. So one company could be worth two-thirds of that entire index. Luna: That's mind-boggling. And it's happening while the Russell 2000 itself is up 3.1% this week — it's at 2,921. So small caps are actually having a strong week, which is part of that rotation I mentioned earlier. Investors are moving away from mega-cap growth into value and small caps. Lucas: But SpaceX is the exception. It's a mega-cap growth story that's going to trade on the NASDAQ — ticker symbol s p a c e, I believe — and it could suck all the oxygen out of the room. I mean, if you're a retail investor, you're probably thinking, 'I need to get into this IPO.' But with only 20% allocated to retail, most will be shut out. Luna: So what do they do? Buy the stock on the open market after the debut? That's risky at a $2 trillion valuation. I remember how many people got burned buying into hot IPOs at the peak in 2020 and 2021. Lucas: Right, and that's the tension. The SpaceX story is incredible — the technology, the revenue growth, the vision. But at $2 trillion, you're paying for perfection. And the market environment right now is not kind to growth stocks. The Fed Funds rate is at 3.63%, down just a hair from last month, but still restrictive. Real GDP growth is only 1.6% annualized. So it's not a boom economy. Luna: And yet, the bull market continues. The Dow is at 50,849, basically flat this week. The S&P is at an all-time high. It's a selective market — some sectors are thriving, others are struggling. SpaceX might be the ultimate test of whether growth can still command a premium in this environment. Lucas: Let's look at a couple of the growth stocks that are struggling. Cloudflare — down 9% this week. That's a big move for a company that's still growing revenue at 30% plus. Palantir, down 3.3%. These are names that investors were piling into earlier this year. Now they're selling off. Meanwhile, CrowdStrike is up 3.1% — so it's not all bad. But the divergence is real. Luna: What's driving that? Is it sector-specific, or is it just profit-taking after a big run? Lucas: I think it's a combination. Some of it is profit-taking, sure. But there's also a rotation happening. Investors are moving into value stocks, small caps, and maybe even commodities. Gold, by the way, is at a six-month low despite inflation fears — so that rotation is not into gold. It's into equities that are more reasonably priced. Luna: And that brings us back to SpaceX. If you're an institutional investor, you might be selling some of your overvalued growth positions to free up cash for the SpaceX IPO. That would explain some of the weakness in names like Cloudflare and Palantir. Retail investors, though, they're left scrambling. Lucas: Exactly. And the retail allocation cut makes it even harder. So what's the play for the average listener? I mean, we're not giving advice, but we can talk about the dynamics. If you want to get into SpaceX, you might have to wait until it starts trading on the open market, and then you're competing with algorithms and institutions. Luna: And you're paying a premium. The prediction markets are already pricing it above $2 trillion. That's a lot of optimism baked in. I think the smarter move might be to look at companies that could benefit from SpaceX's success — like satellite internet competitors or space-adjacent suppliers. But that's a longer-term play. Lucas: Speaking of longer-term plays, I want to go back to the small-cap rally. The Russell 2000 is up 3.1% this week, and it's been outperforming the S&P 500 for a few weeks now. That could be a signal that the bull market is broadening out. If that continues, then the SpaceX IPO might be a peak of growth-stock mania rather than the start of a new wave. Luna: So you're saying the rotation out of growth into value might accelerate after the SpaceX IPO? Lucas: It's possible. If SpaceX debuts at $2 trillion and then trades sideways or even declines, that could be a negative signal for other high-growth names. But if it rockets higher — say, to $3 trillion — then it could reignite the growth trade. It's a pivotal moment. Luna: And we'll be watching. Before we wrap, Lucas, I want to mention something that's been on my mind. We do this show ad-free, and that's important to us. If our money conversations have helped you think about a decision differently — maybe about how to approach an IPO or a rotation — then it's worth a coffee. Lucas: Yeah, honestly, if today was worth a coffee to you, that's the link — buy me a coffee dot com slash fexingo. It's the smallest ask, and it keeps us independent. Luna: Totally. No pressure, just if it's useful. And now, back to the market — so where do you see the best opportunity right now, given this split between growth and value? Lucas: I think the Russell 2000 is worth a closer look. Small caps are less crowded, they're benefiting from domestic economic stability, and they're not as exposed to the valuation compression that's hitting big tech. But you have to pick carefully. Not all small caps are created equal. Luna: And not all IPOs are SpaceX. We'll see how it plays out. Thanks for listening.