r/stocks
My buy for the SpaceX IPO: Low-float ETF multiplied ARM
Author buys ARM as a proxy for SpaceX IPO hype, citing its ultra-low float and potential ETF multiplier effect.
- Ultra-low float (only 110M shares) creates scarcity and potential for price pumping.
- Could benefit from ETF multiplier effects and trading volume when SpaceX enters the Nasdaq 100.
- Strong underlying fundamentals provide a good worst-case scenario safety net.
Elon obviously wants to get into the N100 fast as possible, will sell 30% to retail who are likely to hold for a long time, and has a float of about 4-% (555.6 million shares). It will be subject to a 3x multiplier for APs who want to buy it to make more ETFs such as QQQ. By actually making the shares in low supply, the price will be pumped up as long as ETFs are going up.
ARM has just 110 million shares on the market, 10% of the company, and should be subject to the required multiplier rule because of its low float. Day traders and swing traders will likely be holding it when SpaceX enters N100.
Worst case scenario, I invested in a company with good fundamentals.
(I am not a professional advisor, this post is for entertainment purposes only, etc etc)