After surging to a high in August, SPCX has been sliding ever since. Now it’s trading sideways on lighter volume around 148, as if waiting for a verdict. The earnings figures have already been picked clean: revenue is expected to come in around 12.9 billion, EPS at roughly $0.14 to $0.19, and the market has even popped the champagne early over its “first profitable quarter.” But last time, Q2 revenue beat expectations by 15% and the stock promptly fell 9%, because capital expenditure surged to 18.4 billion and the market worried it was burning cash to buy growth.
This time, the script will probably be much the same. Starlink user growth is indeed strong, with 1.7 million net additions in a single quarter, but ARPU is holding steady at $66—more users, but no higher prices. What’s really keeping investors from taking a big position are two other potential landmines beyond earnings: 1.3 billion shares are set to be unlocked on October 22, followed by another 329 million shares hitting the market on the 24th. And Starship’s 15th flight is reportedly set to attempt a “chopstick catch” of the spacecraft for the first time. Success would be a milestone; failure would be an emotional bombshell. Morgan Stanley says earnings are just the “appetizer.” I half believe that: it doesn’t really matter whether you eat the appetizer—the table could be flipped at any moment before the main course is served safely.
So my take is that this isn’t the place to gamble on earnings. The options market is pricing in a move of nearly 7.5% after earnings, with 162 on the upside and 139 on the downside—not favorable odds. If you really want to make a move, better to wait for one of two things to happen: either Starship’s 15th flight gives a clear signal of reusability, or the lockup expiration knocks the stock into a decent-sized hole. Around 148, it looks as though institutions may be providing support, but holding the floor and pushing the stock higher are two different things. Low-volume sideways trading is the most grinding kind—don’t volunteer to stand guard for someone else halfway up the mountain. $SPCX #SpaceX
This time, the script will probably be much the same. Starlink user growth is indeed strong, with 1.7 million net additions in a single quarter, but ARPU is holding steady at $66—more users, but no higher prices. What’s really keeping investors from taking a big position are two other potential landmines beyond earnings: 1.3 billion shares are set to be unlocked on October 22, followed by another 329 million shares hitting the market on the 24th. And Starship’s 15th flight is reportedly set to attempt a “chopstick catch” of the spacecraft for the first time. Success would be a milestone; failure would be an emotional bombshell. Morgan Stanley says earnings are just the “appetizer.” I half believe that: it doesn’t really matter whether you eat the appetizer—the table could be flipped at any moment before the main course is served safely.
So my take is that this isn’t the place to gamble on earnings. The options market is pricing in a move of nearly 7.5% after earnings, with 162 on the upside and 139 on the downside—not favorable odds. If you really want to make a move, better to wait for one of two things to happen: either Starship’s 15th flight gives a clear signal of reusability, or the lockup expiration knocks the stock into a decent-sized hole. Around 148, it looks as though institutions may be providing support, but holding the floor and pushing the stock higher are two different things. Low-volume sideways trading is the most grinding kind—don’t volunteer to stand guard for someone else halfway up the mountain. $SPCX #SpaceX