The biggest IPO in market history is finally here. Elon Musk’s SpaceX began trading on Nasdaq at $135 per share, raising $75 billion and achieving a massive $1.77 trillion valuation.
While the launch has generated huge excitement, Chart analyst Michael Burry says that the Nasdaq 100 could face a massive sell-off before a major buying event arrives in July.
On June 12, SpaceX launched its IPO by offering 555.5 million shares under the ticker SPCX. The company is now valued at about $1.77 trillion, making it one of the biggest stock market listings ever.
Investor demand has been huge, with reports showing more than $250 billion worth of orders for the IPO, nearly four times the shares available.
To take part in such a large offering, many investment funds often sell other assets to raise cash.
The IPO has also boosted Elon Musk’s wealth. His SpaceX stake is now worth around $866 billion, helping push his total net worth above $1 trillion when combined with his holdings in Tesla and other companies.
While many investors are focused on SpaceX’s first day of trading, Michael Burry believes a larger market shift is already underway.
“We’ve started the tech selloff ahead of the SpaceX IPO,” he said, pointing to recent weakness across major technology stocks.
His argument is simple, that large investment funds need cash to buy SpaceX shares. To raise that cash, many institutions are reducing positions in major technology stocks, including companies such as Nvidia, Apple, and Microsoft.
The result could be continued weakness in the Nasdaq 100 during the 15-day waiting period before SpaceX becomes eligible for index inclusion.
In a recent market analysis, Burry noted that the Nasdaq 100 had already fallen 8.34% before showing signs of a short-term recovery. According to him, that bounce may only be temporary.
His chart analysis shows multiple bearish divergences across both RSI and MACD indicators, signals that traders often watch for signs of weakening momentum.
However, Burry’s chart also outlines an Elliott Wave structure, suggesting the current rally could be a Wave 2 recovery before a larger Wave 3 decline develops.
This means that the market may be rallying before another leg lower.
Further, Burry points to July 6 as a major date for investors.
Under Nasdaq’s Fast Entry rules, many passive index funds and ETFs tracking the Nasdaq 100 cannot immediately buy newly listed companies. Instead, they must wait before adding SpaceX to their portfolios.
Once that waiting period ends, billions of dollars from index-tracking funds could flow into SpaceX shares at the same time.
According to Burry, the market could move in two phases. First, technology stocks may face selling pressure as funds raise cash to buy SpaceX shares. Then, once SpaceX is added to the Nasdaq, index funds could start buying the stock, potentially pushing its price higher.
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