--- title: "To Get on Board with SpaceX, Wall Street Is Ready to Sell Off the Mag 7 First!" type: "News" locale: "en" url: "https://longbridge.com/en/news/285017506.md" description: "Several of Wall Street's largest mutual funds are already planning the same move: selling their stakes in tech giants to raise cash for the SpaceX IPO. Some fund managers believe the SpaceX IPO will prompt investors to dump Tesla shares. This year, Tesla has fallen 11% due to electric vehicle sales missing expectations" datetime: "2026-05-04T02:09:07.000Z" locales: - [zh-CN](https://longbridge.com/zh-CN/news/285017506.md) - [en](https://longbridge.com/en/news/285017506.md) - [zh-HK](https://longbridge.com/zh-HK/news/285017506.md) --- # To Get on Board with SpaceX, Wall Street Is Ready to Sell Off the Mag 7 First! About ten days ago, a private jet emblazoned with the SpaceX logo flew nearly 200 investors from top Wall Street funds from Newark, New Jersey, to the southern tip of Texas for a multi-day executive roadshow. According to participants, the plane was packed to capacity, unable to accommodate everyone who wanted to board. The massive IPO of this rocket and AI company under Elon Musk is forcing fund managers into a series of chain reactions: first determining how much SpaceX equity they want, then estimating how much allocation they can actually secure, followed by raising cash or selling holdings to fund the purchase, and finally rebalancing portfolios once the new stock is included. Once listed, SpaceX is expected to jump directly into the top ten global companies by market capitalization, with a potential valuation as high as $1.5 trillion. Notably, after acquiring xAI last year, SpaceX recorded a net loss of $4.9 billion and consumed significant cash, with its growth largely tied to the world's most powerful launch vehicle project, which has not yet been commercialized. ## What to Sell? The Mag 7 Takes the Hit Multiple investors stated that the most likely candidates for reduction are the "Mag 7"—Alphabet, Amazon, Apple, Meta, Microsoft, Nvidia, and Tesla. These seven giants faced pressure earlier this year but rebounded strongly in April, with the Bloomberg Mag 7 Total Return Index rising 14% for the month and gaining about 2% year-to-date. Tony Wang, who manages the $12 billion T. Rowe Price Science & Technology Fund, stated plainly that his buy/sell decisions regarding the SpaceX IPO are made "in the context of the Mag 7," with the core consideration being "which offers the greatest risk-adjusted return." Wang's largest holdings include Apple, Nvidia, and Broadcom, but he declined to reveal specific rebalancing plans, only noting that other fund managers might reduce positions in these large-cap, highly liquid stocks. Another structural factor is funds' industry concentration limits. Tech stocks currently account for about two-thirds of the holdings in large-cap growth funds, and the addition of SpaceX would further push up this ratio. To buy SpaceX, some funds must correspondingly cut existing tech holdings. Additionally, some fund managers are discussing reducing stakes in targets that directly compete with SpaceX, such as the traditional aerospace and defense sector. Tax considerations are also part of the equation. Tech stocks that have declined recently are ideal candidates for "tax-loss harvesting"—Microsoft has fallen about 25% since its peak last October. ## Passive vs. Active: Who Faces Greater Pressure? The ongoing trend of capital flowing into passive index funds and out of actively managed funds complicates this fundraising game. Index funds will not buy SpaceX until it is included in the index, while actively managed fund managers, who are already facing redemptions, are selling stocks to meet those outflows—if they also want to participate in the SpaceX IPO, the selling pressure will only intensify. A report from Goldman Sachs last week pointed out that historically, U.S. mutual funds usually increase their cash ratios before major IPOs, but this has not happened this year. However, Goldman Sachs also cautioned that large IPOs typically do not have a significant impact on the performance of large-cap stocks. Tesla holders face additional dilemmas. Ross Gerber of Gerber Kawasaki, who manages a $4 billion fund, believes the SpaceX IPO will prompt investors to sell Tesla shares. "Many Tesla investors want to own SpaceX, and they will sell some Tesla to buy SpaceX." Tesla has already dropped 11% this year due to electric vehicle sales missing expectations. Gerber himself holds SpaceX shares and plans to sell part of his position as soon as possible after the IPO, believing the company's valuation should be lower than its current private market valuation of $1.25 trillion. Strong demand from public market investors could also benefit existing SpaceX shareholders—they may have the opportunity to sell shares early, before the usual six-month lock-up period expires, although the specific timing and scale remain unclear. ### Related Stocks - [TSL.US](https://longbridge.com/en/quote/TSL.US.md) - [TSLA.US](https://longbridge.com/en/quote/TSLA.US.md) - [TESL.US](https://longbridge.com/en/quote/TESL.US.md) - [TSDD.US](https://longbridge.com/en/quote/TSDD.US.md) - [GOOGL.US](https://longbridge.com/en/quote/GOOGL.US.md) - [GOOG.US](https://longbridge.com/en/quote/GOOG.US.md) - [AMZN.US](https://longbridge.com/en/quote/AMZN.US.md) - [AAPL.US](https://longbridge.com/en/quote/AAPL.US.md) - [META.US](https://longbridge.com/en/quote/META.US.md) - [MSFT.US](https://longbridge.com/en/quote/MSFT.US.md) - [NVDA.US](https://longbridge.com/en/quote/NVDA.US.md) - [TROW.US](https://longbridge.com/en/quote/TROW.US.md) - [AVGO.US](https://longbridge.com/en/quote/AVGO.US.md) - [GS.US](https://longbridge.com/en/quote/GS.US.md) - [NVD.DE](https://longbridge.com/en/quote/NVD.DE.md) - [W4VR.SG](https://longbridge.com/en/quote/W4VR.SG.md) ## Related News & Research - [EXCLUSIVE-Only Elon Musk can fire Elon Musk from SpaceX, filing shows](https://longbridge.com/en/news/284593138.md) - [Prediction: Will the SpaceX IPO reach a $1.75 trillion valuation?](https://longbridge.com/en/news/284399186.md) - [SpaceX Board has set a Mars bonus for Elon Musk](https://longbridge.com/en/news/284504196.md) - [Musk's Mega Rocket Comes At Mega Price: $15 Billion For Starship](https://longbridge.com/en/news/284929720.md) - [Elon Musk Sides With Viral 'Pokémon Economy' Analogy On Free Markets— 'This Is How...'](https://longbridge.com/en/news/284765391.md)