Hedge funds eye SpaceX after shares fall near IPO

Shares of SpaceX slipped close to the company’s IPO price in the days after the stock joined the Nasdaq 100, prompting hedge funds to change trading positions.

Dave Allen of Plato Investment Management sold his entire holding on the third trading day and described SpaceX as a “meme stock” because of sharp intraday and multi-day swings.

Thomas Rice of Minotaur Capital opened a short position in the shares. A short position is a way for funds to profit from or hedge against further price declines.

Index-linked funds and heavy retail buying supported the shares in the early sessions after the Nasdaq 100 listing. Those buyers did not all remain during the later pullback, and trading volume and price moved sharply over several sessions.

Some professional managers reduced exposure or opened positions that benefit from falling prices, while other investors kept their holdings. The activity showed a difference in trading behavior between retail buyers and institutional managers.

The company’s market debut drew attention because of its public profile and long-term projects, factors that complicate near-term valuation. Early trading reflected a mix of index flows, retail orders and active fund trading rather than a single clear price driver.

Hedge funds have responded by selling positions, trimming exposure or establishing short bets as they weigh the stock’s recent swings and current market price.