So it seems I was both right and right about the SpaceX (Nasdaq: SPCX) IPO.
Right, because I predicted SpaceX IPO fever could drive space stocks higher. Indeed, shares of satellite communications company AST SpaceMobile (Nasdaq: ASTS) were at one point up 61% since my prediction.
I was also right, unfortunately, about what would happen on the IPO date. And this, in a nutshell, is why AST stock fell 10.5% through 11:25 a.m. ET today.
Image source: Getty Images.
Three scenarios for SpaceX and space stocks
Four months ago, I ran down three theories for how the SpaceX IPO might play out, both for SpaceX and for other space stocks. Briefly, these scenarios went like this:
- Option 1: SpaceX IPO fever could make space stocks more popular, driving up their stock prices.
- Option 2: SpaceX could make space stocks not named SpaceX less popular, if they suffered by comparison to SpaceX, which is so much bigger and more profitable than SpaceX's competitors.
- Or Option 3: Investors wanting to buy SpaceX stock might sell shares of other space stocks to raise cash to buy SpaceX instead.
NASDAQ: ASTS
Key Data Points
What's next for AST SpaceMobile stock
The fact that AST stock went up so much in four months means I was right about Option 1. The fact that AST stock is selling off today -- the same day investors are presumably preparing to pay for their new SpaceX IPO shares -- suggests I was right about Option 3 as well.
And Option 2? This remains to be seen. SpaceX's IPO prospectus made clear SpaceX isn't nearly as profitable as we once believed -- indeed, that it's losing money. Bigger isn't necessarily better, and AST could still be a winner. It still needs to get some more satellites in orbit, of course, and begin beta testing.
But at least there's a chance.
