By Gordon Gottsegen
Investors often use shares of Tesla to trade on price swings or to bet on Elon Musk himself
Elon Musk's SpaceX has its initial public offering on Friday.
Ahead of SpaceX's blockbuster IPO on Friday, many investors have closely scrutinized the company's filings with the Securities and Exchange Commission to understand how the business is doing.
One of the things revealed in these filings is that SpaceX (SPCX) is not a profitable business. A recent S-1 filing even noted: &#34;We have a history of net losses and may not achieve profitability in the future.&#34;
Typically, investors want to put their money into profitable companies that grow over time, so the fact that SpaceX is not there yet has raised some red flags for investors. However, those investors may be missing an important factor: Elon Musk's public companies don't always trade on fundamentals.
Read: Here are all the red flags in the SpaceX IPO
To try to predict how shares of SpaceX will trade, it may be worth looking at Musk's other public company, Tesla (TSLA).
Tesla's primary business is manufacturing electric vehicles, but it also operates an energy-storage business and is expanding into robots and automation. Many of the investing professionals on Wall Street have been critical of Tesla because it trades at a much higher valuation than all other major automakers, and its business fundamentals don't justify that sky-high valuation.
Tesla's $1.4 trillion market capitalization (as of market close June 10) is far greater than the market cap of the next 10 largest automakers combined ($824 billion).
But for many Tesla investors, the stock isn't about auto sales - it's about investing in the future that Musk envisions. Retail investors specifically were happy to invest in Musk's vision for Tesla, which caused it to become the stock with the most retail-investor purchases for several years following the COVID pandemic.
Tesla being tied to Musk can cut both ways, however. The stock suffered in 2025 due to Musk's involvement with the Trump administration's &#34;Department of Government Efficiency,&#34; and again when Musk butted heads with President Trump on social media.
Joe Mazzola, the head trading and derivatives strategist at brokerage Charles Schwab (SCHW), said that Schwab's clients like to use Tesla as a trade that relies more on technical patterns than business fundamentals. He noted that when the share price trades around the $450 level, Schwab customers tend to sell the stock; when it trades around the $350 level, they tend to buy it.
&#34;Tesla tends to be a trade with clients at Schwab,&#34; Mazzola said. &#34;It's been hard to make a fundamental call on the stock - I mean, that's been the case for 10 years - but to me, it's really a technical call.&#34;
Schwab data showed that Tesla was among the top five most sold stocks in May in terms of net sales. As Mazzola said, this was the result of price action, and not necessarily Tesla's business operations. Shares of Tesla rallied from early April to the middle of May, then fell as the share price approached $450.
How retail investors on Schwab trade Tesla may be relevant to SpaceX. SpaceX has said that it will reserve up to 30% of the available IPO shares for individual investors, and Schwab is one of five retail brokerages that will provide IPO access to its customers. With all the hype going into the offering, it's highly possible that SpaceX is traded by the same people who trade Tesla, and for the same reasons that they trade Tesla.
&#34;As you can imagine, it's been the talk of the town and it's generating a ton of buzz. I think it's an interesting look at how people are willing to value upside in Elon [Musk],&#34; Mazzola said. &#34;It'll be a really interesting day on Friday as we watch the tape move.&#34;
-Gordon Gottsegen
This content was created by MarketWatch, which is operated by Dow Jones &amp; Co. MarketWatch is published independently from Dow Jones Newswires and The Wall Street Journal.
(END) Dow Jones Newswires
06-11-26 1522ET

TSLA

TSLT

TESL

Ahead of SpaceX's IPO, analysts suggest its stock may trade like Tesla, driven by retail investor sentiment and Elon Musk's influence rather than financial fundamentals. Despite SpaceX's history of net losses, investors are betting on Musk's vision. Data from Charles Schwab indicates Tesla is often traded based on technical patterns tied to price levels, not business operations. This behavior may repeat with SpaceX, as many retail investors access the IPO through similar brokerages.

- Ahead of SpaceX's IPO, investors are analyzing its SEC filings, revealing the company is not currently profitable.  
- Many view SpaceX's future similar to Tesla, where investors often prioritize Musk's vision over traditional financial fundamentals.  
- With up to 30% of IPO shares reserved for retail investors and significant buzz surrounding the offering, trading patterns may align closely with those observed in Tesla.

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SpaceX's stock could follow the same path as Tesla - not always trading on fundamentals