Quick Look
- SpaceX proxy stocks like EchoStar and AST Spacemobile saw significant losses as their IPO approaches.
- Despite price drops, options traders remain active, with call buying indicating continued interest, potentially driven by both retail and institutional demand.
AI-generated summary
Why It Matters
SpaceX's upcoming IPO has led to increased trading activity in 'proxy stocks' that are perceived to be linked to the company. These stocks have seen significant price swings.
There ain't nothing like the real thing.
SpaceX "proxy stocks," whose options volumes were booming ahead of Friday's historic initial public offering, are unwinding gains. Some look like they have more potential for a rebound than others.
Shares of EchoStar, the Colorado-based networking business that owns an estimated 3% of SpaceX stock, reversed and dropped 14%. AST Spacemobile, whose satellites are expected to launch on a SpaceX rocket next week, saw shares fall nearly 13%. Shares of Virgin Galactic Holdings, completely reversed Thursday's big gain with a 34% loss.
Options traders look unfazed: Calls outnumbered puts in all three names, with AST the most popular, trading more than 250,000 contracts for more than $60 million in premium. More than twice as many calls were bought than puts Friday morning.
"There's a ton of short-dated call buying in these names as a way to get long SpaceX," Danny Kirsch, head of options trading at Piper Sandler, said by phone. "I have no doubt part of it is retail demand but there is definitely institutional demand for SATS."
SATS is the ticker symbol for EchoStar, whose shares were higher by another 5% in early trading Friday. AST SpaceMobile shares was also trading higher at the time.
Concurrent demand for exchange-traded funds that target the space category is also creating a bottleneck of supply that's helping keep prices for the proxy plays elevated, according to Cory Johnson, chief market strategist of San Francisco-based Epistrophy Capital Research.
ETFs like the Procure Space ETF and the Defiance Drone and Modern Warfare ETF both own shares of ASTS. Procure Space, trading as UFO, is up 38% in 2026, while Defiance, trading as JEDI, is up around 33%.
"People who can't buy SpaceX or didn't think they could get enough quick enough, have been plowing money into these ETFs and so these funds are having to buy shares of AST, EchoStar, Spire, etc.," Johnson said in a phone call. "It has nothing to do with the quality of these companies, demand for their products, or their cash flows."
One thing seems clear: Demand for SpaceX options that will begin trading on Tuesday is likely to be nothing short of astronomic. The IPO was set to price at $135 a share, a sweet spot for retail traders who don't mind paying expensive premiums on nominally low-priced stocks.
Shares of EchoStar and AST, which closed at $128.13 and $97.56 on Thursday, trade with implied volatilities of 91 and 126, respectively.
What to Watch
AI outlook — possibilities, not facts
Demand for SpaceX options will be astronomic.
Very likely · Immediate
Open Questions
- Will proxy stocks rebound after the IPO?
- What is the true institutional demand for these companies?
- How will SpaceX's IPO directly impact these proxy stocks?
