ASTS, RKLB, RDW, SIDU Slip Overnight: Retail Hopes For SpaceX-Fueled S&P 500 Buying Frenzy Take A Hit

• Space stocks fell overnight after S&P said it would make “no changes” to S&P 500 eligibility rules for newly listed megacaps.

• SpaceX remains ineligible for the S&P 500 after posting a $4.94 billion net loss in 2025.

• The IPO is expected to price on June 11, with trading set to begin the next day.

Space stocks slipped overnight heading into Friday after S&P Global dashed hopes that SpaceX’s record-breaking IPO could quickly gain entry into the S&P 500, removing a potential catalyst that investors expected could trigger billions of dollars in passive-fund buying across the sector.

Space Stocks Brace For SpaceX Debut

In overnight trading, AST SpaceMobile (ASTS) fell 2%, Rocket Lab USA (RKLB) and Redwire (RDW) each declined 3%, and Sidus Space (SIDU) shed 1%. The decline came a day after space stocks mostly rallied on optimism around SpaceX’s IPO roadshow hosted by JPMorgan, where CEO Elon Musk pitched an ambitious vision for over 100,000 Starlink satellites and orbital AI infrastructure.

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Space stocks have been volatile in the run-up to next week’s SpaceX IPO debut, with investors expressing concerns about the company’s sky-high valuation on weak financials in 2025. According to its IPO prospectus, the company plans to sell 555.6 million shares at $135 each, raising $75 billion and valuing the company at $1.77 trillion. On a fully diluted basis, the valuation exceeds $1.8 trillion. The offering is scheduled to price on June 11, with shares expected to begin trading the next day.

However, the sector also received a boost from SpaceX’s IPO filing, which described its opportunity as the “largest actionable total addressable market in human history” and estimated a $28.5 trillion market spanning launch services, Starlink connectivity, direct-to-cell communications, and AI infrastructure.

SpaceX’s S&P 500 Setback

S&P Dow Jones Indices said on Thursday that “no changes” would be made to the eligibility criteria for the S&P 500, S&P MidCap 400 and S&P SmallCap 600 after its consultation on the treatment of newly listed megacap firms. The index provider said that financial viability requirements, IPO seasoning periods, and minimum investable weight-factor rules would remain unchanged.

S&P said, “exceptions to the financial viability, seasoning, and IWF requirements should not be granted solely based on market capitalization.” The ruling is a hurdle for SpaceX, which posted a $4.94 billion net loss in 2025. S&P 500 constituents must generate positive GAAP earnings in both the latest quarter and the trailing four quarters to qualify for inclusion.

Story Continues

While S&P rejected proposals that could have accelerated SpaceX’s entry into the S&P 500, S&P MidCap 400, and S&P SmallCap 600, it did approve changes for its broader S&P Total Market Index, S&P Completion Index, and Dow Jones U.S. Total Stock Market Index. Under the revised rules, certain large IPOs can qualify for fast-track inclusion if they meet updated float-adjusted market cap requirements, allowing them to be added with five business days’ notice.

SpaceX’s Passive-Buying Thesis Takes A Hit

The consultation drew attention from investors as a rule change could have accelerated SpaceX’s entry into the S&P 500, potentially forcing trillions of dollars in passive index funds to purchase shares shortly after the company’s debut. Tesla influencer Alexandra Merz, CEO of L&F Investor Services, had previously laid out a scenario in which accelerated index inclusion and SpaceX’s relatively limited public float could compress the traditional IPO demand cycle.

Posting on X under the handle TeslaBoomerMama, Merz had estimated last month that Nasdaq-100 index funds could eventually be required to purchase between $8 billion and $12 billion worth of SpaceX stock. She also projected that FTSE Russell indexes could contribute another $10 billion to $15 billion in demand, while CRSP benchmarks tracked by Vanguard funds could add between $15 billion and $25 billion in demand, based on float-adjusted market cap.

After S&P’s late Thursday announcement, Merz criticized S&P’s decision: “S&P will regret this,” she said on X. “I am certain that many investors will want index funds that have SpaceX, Anthropic and OpenAI in them. Well, they will move to Nasdaq 100 rather than S&P index funds.” She added that “S&P has never been friendly with Elon’s company, that’s not news.”

SpaceX Still Has Index Paths

Nasdaq has already modified its rules to make it easier for newly listed megacap companies such as SpaceX, Anthropic, and OpenAI to join the Nasdaq-100. Under the revised rules, some of the largest IPOs can become eligible after as few as 15 trading days.

Nasdaq-100 index funds would then be required to purchase a sizable portion of publicly available shares of SpaceX. SpaceX has also become eligible for inclusion in FTSE Russell benchmarks under newly adopted fast-entry rules.

How Do Retail Traders Feel About Space Stocks?

On Stocktwits, SpaceX drew ‘extremely bullish’ sentiment amid ‘extremely high’ message volume. Retail sentiment for ASTS was ‘bearish’ and on RKLB was ‘neutral’, both amid ‘low’ message volume. RDW carried ‘extremely bullish’ sentiment with ‘high’ message volume, while SIDU remained ‘bullish’ amid ‘normal’ message volume.

Over the past year, RKLB has surged 346%, ASTS has gained 274%, SIDU has advanced 218%, while RDW is up 26%.

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Deepti Sri has no position in any of the stocks mentioned in this article. StockTwits’ news team content is for informational purposes only and is not intended as investment advice. For more, see our editorial policy. This article was originally published on StockTwits.

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