Do not say you were not warned.
Previewing the SpaceX (SPCX 1.00%) IPO earlier this year, I explained what investors should expect in three simple steps.
- First: SpaceX IPO fever would make space stocks skyrocket -- and Intuitive Machines (LUNR 2.25%) raced ahead 71% in four months.
- Next: Investors would question whether they wanted to own a second-tier space stock like Intuitive at all, when industry leader SpaceX would soon go public.
- Finally: Investors would rush to sell other space stocks, and put the money in SpaceX instead.
We're in this final stage now, and Intuitive Machines stock is down 23.5% since SpaceX's IPO.
Image source: Getty Images.
Intuitive's fall was a no-brainer
Intuitive Machines stock dropped another 9% through 10:50 a.m. ET today -- while SpaceX stock gained 10%. This brings to mind the old advice "follow the money," except here, the money trail is so obvious you don't actually need to do much following.
Investors are pulling money out of Intuitive and pouring it into SpaceX stock instead.
NASDAQ: LUNR
Key Data Points
What's next for Intuitive Machines stock
For Intuitive Machines investors (like me), this is discouraging -- but can Intuitive turn things around? According to data from StreetInsider.com, call options to buy Intuitive stock at higher prices are currently outrunning put options to sell by a 1.6-to-1 ratio.
That's not a huge difference. But it does suggest that some investors are expecting a turnaround.
You must admit there's a huge valuation gap between these two companies. Both Intuitive and SpaceX are unprofitable and burning cash. But Intuitive stock trades at less than 10x sales today, versus SpaceX stock that costs 130x its unprofitable sales.
In any world where math matters, this valuation gap should close over time, pushing SpaceX stock down... and Intuitive stock up.
