In one version of this tale, a person purchased SpaceX for $220 in the middle of June, felt extremely successful for about four days, and then saw almost half of their investment vanish by the beginning of August. Many people are currently experiencing that version of the story. To his credit, Jim Cramer anticipated it or at least loudly cautioned that nobody should be completely taken aback.
On June 12, SpaceX made its public market debut at $135 per share. $150 was the opening price. It reached $225.64 by June 16, momentarily raising the company’s valuation above $3 trillion and surpassing both Microsoft and Amazon. That peak didn’t last very long. The stock was trading close to $112 by the end of July, about 50% below its peak, and the questions were coming in more quickly than the answers.
Cramer’s perspective on July 28 was precise but uncomplicated. He wasn’t criticizing SpaceX. He was not giving up on Elon Musk. He was obviously presenting a timing argument on Mad Money. “If you want to go big,” he stated, “at least wait for the first wave of the lockup on insider selling to expire next Thursday and let it drag the share price lower before you pull the trigger.” August 6th was that Thursday. Approximately 911.5 million previously restricted shares were suddenly available for sale following the lockup expiration, more than doubling the public float overnight.
Pausing on that number is worthwhile. A market that was already anxious about earnings, processing a 50% drawdown, and doubting the longevity of SpaceX’s AI revenue contracts welcomed more than 900 million shares. Basic supply and demand was Cramer’s point. Lower prices are typically the result of having more shares available, at least temporarily. It almost doesn’t matter if that proved to be accurate to the dollar. It made sense.
On August 4, the earnings report was released. It should have been good news that revenue exceeded expectations. However, capital expenditures were significantly higher than Wall Street had predicted, and the stock dropped 13.6% more that day. The lockup followed. The time that Cramer had been warning about for weeks finally arrived.
Beyond the usual volatility of an IPO, what truly complicates the SpaceX story is the AI revenue question that lies at the heart of it all. The announcement of SpaceX’s compute-rental agreements with Google and Anthropic sparked excitement on Wall Street. It wasn’t that those deals didn’t exist that worried Cramer. Either party could cancel with ninety days’ notice. That partnership isn’t set in stone. According to Cramer, this type of business arrangement makes the revenue “very tough to model.” It feels more optimistic than accurate for analysts to base their multi-year earnings forecasts on the supposition that SpaceX will continue to sign such deals.
Cramer’s messaging had changed, or perhaps simply matured, by August 5. He was no longer merely cautioning about the timing. He was arguing for a longer time. “SpaceX could be a 100-year piece of paper,” he said, drawing a comparison between the stock and railroad bonds that took generations to pay off. He brought up the growing compute footprint, Starship, and Starlink. He stated that if Musk weren’t involved, he would never suggest the business; this isn’t an endorsement of the cost, but rather of the person in charge.
Even tho it doesn’t specify where to place a limit order, there is an element of honesty in that framing. In essence, Cramer is saying, “Don’t let that multigenerational optimism make you sloppy about when you buy in. This might be a great investment for your children, or possibly your grandchildren.” People end up holding a stock at $220 and wondering what happened because they confused those two conversations.
Whether the August selling pressure has completely permeated the market is still up for debate. Both true believers who see Musk creating something truly historic and skeptics who believe the valuation ran too far ahead of any realistic earnings timeline are drawn to the SpaceX story. Cramer strikes a balance between being a short-term realist and a long-term believer. It can be argued that this is the only reasonable position to take.
