Cathie Wood makes $20.5M bet on sliding tech stock | Official Website of Louis Velazquez, entrepreneur, finance guy and tech innovator

SpaceX (SPCX) investors are reeling after a brutal sell-off.

The stock has comfortably slipped below its $135 IPO price, according to Yahoo Finance, facing concerns over Starship delays, an incredibly rich valuation, and a major post-earnings lockup release.

Consequently, SpaceX closed another 3.3% lower at $119.85 on Monday, as reported by The Wall Street Journal.

Investors were selling, but Cathie Wood was buying. ARK Invest added SpaceX across four ETFs, signaling that Wood views the retreat as an opportunity.

The move lands at a relatively shaky moment for ARK. Its flagship Innovation ETF was up 2.6% year-to-date through July 20, according to Yahoo Finance, well behind its technology category, while the Space and Defense ETF had gained 17.9%.

Nevertheless, the tension is clear: Wood’s conviction is strengthening just as investors are questioning SpaceX’s valuation.

Why Cathie Wood is buying SpaceX despite the slide

Cathie Wood’s ARK Invest scooped up 170,634 SpaceX (SPCX) shares on Monday, July 20, across four ETFs.

The breakdown was that the flagship ARK Innovation ETF accounted for 97,664 shares, while ARK Autonomous Technology & Robotics, ARK Next Generation Internet, and ARK Space Exploration accounted for the remainder, according to Whalequant.

Based on SpaceX’s $119.85 Monday closing price, the combined purchase was valued at nearly $20.5 million.

According to my calculations, ARK has added nearly 1.20 million additional SpaceX shares since the IPO, spending an estimated $162.5 million.

That includes an initial allocation of 3.29 million shares. SpaceX priced its IPO at $135 as reported by Reuters, with the stock closing its first day of trading at $160.95. Based on my calculations, ARK’s original allocation cost approximately $444 million and was worth $530 million by the closing bell.

Cathie’s bullishness on SpaceX is driven by a cost-and-scale flywheel.

ARK argues in a press release that reusable rockets have effectively lowered SpaceX’s launch costs by roughly 95% since 2008, from about $15,600 per kilogram to below $1,000.

If Starship eventually pushes below $100, SpaceX might be able to deploy larger satellite networks and new orbital infrastructure at costs virtually impossible to match.

Starlink is at the heart of it and the company’s primary recurring revenue engine, and ARK reported over 12 million active customers by the time of the IPO.

On top of that, ARK argues that a fully reusable Starship might make orbital data centers nearly 25% cheaper than terrestrial compute, but even without it, its model places SpaceX’s expected 2030 enterprise value near $2.5 trillion, with a roughly $1.7 trillion bear case and $3.1 trillion bull case.

That forecast, though, was built from SpaceX’s $350 billion December 2024 valuation, and the current investment case is heavily dependent on Starship execution, Starlink margins, and AI infrastructure becoming commercially viable.

What else did Cathie Wood buy Monday?

According to Whalequant, ARK’s largest purchase apart from SpaceX stock was Meta Platforms (META), with 28,106 shares valued at approximately $18.2 million. It also bought:

Tempus AI (TEM): 188,785 shares
Compass Pathways (CMPS): 238,048 shares
Archer Aviation (ACHR): 121,300 shares
Eli Lilly (LLY): 2,730 shares
Prime Medicine (PRME): 491,418 shares
Pony AI (PONY): 90,778 shares
Security National Financial (SNFCA): 83,233 shares
WeRide (WRD): 54,278 shares
Absci (ABSI): 15,996 shares
Xenon Pharmaceuticals (XENE): 9,408 shares
Kodiak Sciences (KOD): 14,195 shares

The trading pattern points to a rotation of capital toward ARK rather than a broad risk-on bet. It sold 203,352 Shopify (SHOP) shares, alongside positions in Baidu (BIDU), Iridium Communications (IRDM), Robinhood Markets (HOOD), Advanced Micro Devices (AMD), Snowflake (SNOW), Illumina (ILMN), and others.

Total reported purchases were approximately $59.3 million, compared with around $57.8 million in sales.

Cathie Wood’s ARK buys SpaceX shares as the stock extends its selloff.

Michael Nagle/Bloomberg via Getty Images

How SpaceX stock is doing?

It has been a bumpy ride, to say the least, for Elon Musk’s SpaceX since its blockbuster IPO.

As I mentioned, SpaceX stock finished Monday at $119.85, down approximately 3.4% for the session. That placed the stock roughly.

11.2% below its $135 IPO price.
25.5% below its $160.95 first-day close.
46.9% below its approximately $225.64 post-IPO high.

According to Seeking Alpha, SpaceX stock has tanked in 10 of the last 11 trading sessions, extending a steep pullback, erasing more than $1 trillion from its peak valuation.

With a market capitalization of $1.57 trillion, SpaceX ranks as the world’s 10th-most-valuable company, according to CompaniesMarketCap.

What has changed for SpaceX since its IPO?

Starship’s first post-IPO test was aborted.Reuters reported that Flight 13 was halted just a second before liftoff on July 16 after multiple Super Heavy Raptor engines failed to ignite. The automatic shutdown worked, but that setback led to a selloff in the stock.
SpaceX announced a new launch date. According to Investing, the company is now targeting Thursday, July 23, after replacing a couple of engines. The mission is expected to carry 20 experimental Starlink V3 satellites while testing heat-shield and maneuvering upgrades that are pivotal to future network expansion.
Its first public earnings report is approaching. SpaceX announced that its Q2 results will be released after the market closes on August 4. The report will provide the first post-IPO look at Starlink growth, spending, and cash flow while also triggering a staged lockup expiration that makes up 911.5 million shares eligible for sale.

What are SpaceX’s technicals signaling now?

According to Barchart data, SpaceX remains in a clear short-term downtrend, though the carnage is such that it’s getting oversold enough for a potential relief rally.

Shares are down 10.1% over five days and 20.9% over 20 days, while the $119.85 price sits below the five-day moving average of $126.51 and the 20-day average of $146.74.

Momentum indicators underscore heavy selling.

The nine-day relative strength index, which measures whether the stock is overbought or oversold, stands at 29.44. Readings below 30 generally signal oversold conditions. Stochastic readings are near extremely low levels, suggesting that sellers may be stretched.

However, the directional indicators remain bearish.

The negative directional index of 34.70 is well above the positive reading of 13.72, showing sellers still control the trend. Meanwhile, average true range indicates unusually large daily price swings of roughly $9.64 to $13.03.

The first important resistance level is $126.51, followed by $146.74. Holding $120 could support a rebound, but a decisive break below it may expose the $107-$110 area.

Why SpaceX’s lockup expirations matter

SpaceX is set to report earnings on August 4, according to CNBC, and 911.5 million shares will become eligible for sale on the second trading day afterward.

At Monday’s closing price of $119.85, those shares will be worth roughly $109.2 billion, blowing past the number sold in the IPO.

Another 455.8 million shares could unlock if SpaceX trades at or above $175.50 for five of the 10 sessions ending on earnings day according to Investing.

More SpaceX:

That entails a 46% snapback, which makes the additional release increasingly unlikely. More staged unlocks are scheduled through December 8, potentially raising the tradable float to 40% of outstanding shares.

Eligible shareholders might not necessarily choose to sell, but employees and early investors might cash out. Naturally, the new supply will temporarily overwhelm demand and drive incredible volatility around earnings and each lockup date.

A strong earnings report might help to offset that pressure somewhat.

However, weak cash flow figures, further Starship delays, or heavy insider selling could push the stock down even further into the red.

What SpaceX investors need to watch

Wall Street is still overwhelmingly bullish on SpaceX, despite the bears becoming a lot louder than ever before.

For perspective, Seeking Alpha’s Wall Street data shows that SpaceX attracts an average rating of 4.39 out of 5 and is firmly in Buy territory.

The average price target stands at $240.04, implying roughly 98.4% upside from current levels. However, the spread is enormous, ranging from a low of $62 to a high of $800, underscoring immense uncertainty surrounding its valuation.

The bulls highlight three major assets for SpaceX: dominant launch economics, Starlink’s recurring subscription revenue, and Starship’s potential to lower costs while expanding satellite capacity.

Apart from AI infrastructure, defense contracts, and eventual orbital computing, SpaceX’s valuation is expected to be driven by these factors in the not-so-distant future.

The bears argue that much of this upside is already priced into the stock. Starship remains technically difficult, CapEx remains heavy, and newer businesses might take years to produce meaningful free cash flow.

Prominent short seller Jim Chanos even said that the IPO was backed by “hopes and dreams,” arguing SpaceX was not worth $1.75 trillion under any reasonable five-year assumptions, according to Reuters.

For investors, the best approach is to separate the business from the stock.

SpaceX attracts a ton of eyeballs, but with its upcoming earnings test, it’s important to look for subscriber growth, operating cash flows, and launch cadence to assess if the stock is a long-term bet and worth investing at current levels.