SpaceX IPO: 2 of the top space ETFs are making a surprising move days before blastoff

So overmuch for the looming SpaceX (SPCX) IPO causing a last-minute frenzy successful abstraction ETFs up of its Nasdaq Composite (^IXIC) debut connected June 12.

The analysis: The Tema Space Innovators ETF (NASA) and the Procure Space ETF (UFO) peaked astir May 28. Since then, they person fallen retired of orbit with respective declines of 24% and 19%. Investors are apt raising currency to spell each successful connected SpaceX — alternatively of erring connected the broadside of diversifying for the abstraction concern thesis.

Small-cap abstraction institution Planet Labs (PL) has seen its banal plunge 36% during this stretch. Rocket Lab (RKLB) has shed 24%.

A cardinal favoritism betwixt the UFO ETF and the NASA ETF: UFO does not clasp SpaceX, portion NASA is presently the lone space-themed ETF with SpaceX vulnerability done a special-purpose vehicle.

Rocket Lab is the apical holding successful the NASA ETF, followed by EchoStar (SATS). Rocket Lab is besides the apical holding successful the UFO ETF, followed by Viasat (VSAT).

Bottom line: One shouldn't regularisation retired abstraction ETFs getting different look — and soon — from investors if the SpaceX IPO is good received. The debut volition radiance a large spotlight connected the advancements coming successful abstraction from each players, particularly much established firms similar Planet Labs and Rocket Lab.

"The earlier highest successful the worth of abstraction shares could marque the [SpaceX] IPO consciousness similar 2001's Star Gate series of archetypal order-book instability, ETF forced selling/buying, and scale rebalancing. This could pb to liquidity fragmentation and volatility arsenic the communicative becomes overloaded," said FedWatch Advisors laminitis Ben Emons successful a note.

He added, "Still, post-IPO investors are apt to presumption themselves successful the company's banal due to the fact that of semipermanent expectations for monolithic capex cycles and a multi-decade infrastructure buildout, which tin impact long-duration (free) currency flows."