SpaceX proxy stocks are unwinding fast, and the selloff is telling traders more about positioning mechanics than about the underlying companies. EchoStar dropped 14% on Friday. AST SpaceMobile fell nearly 13%. Virgin Galactic Holdings surrendered all of Thursday’s gain with a 34% loss. The real thing had arrived: SpaceX’s initial public offering, priced at $135 a share.
Why SpaceX Proxy Stocks Moved in the First Place
The logic behind the proxy trade was never complicated. SpaceX was private, and most investors had no direct route in. So money flowed to the next best thing: companies with SpaceX equity stakes, launch contracts, or spectrum relationships.
EchoStar, the Colorado-based networking company, holds an estimated 3% of SpaceX. Its connection runs deeper still: the company filed an 8-K in November 2025 disclosing it had agreed to sell its full unpaired AWS-3 spectrum licence portfolio to SpaceX, according to CapEdge’s record of EchoStar SEC filings, with primary filings held on EDGAR. AST SpaceMobile has satellites expected to launch on a SpaceX rocket. These were stories investors could sell to themselves.
The exchange-traded fund channel amplified everything. Cory Johnson, chief market strategist at Epistrophy Capital Research, explained the mechanism plainly in a phone call: ‘People who can’t buy SpaceX or didn’t think they could get enough quick enough, have been plowing money into these ETFs and so these funds are having to buy shares of AST, EchoStar, Spire, etc. It has nothing to do with the quality of these companies, demand for their products, or their cash flows.’
The Procure Space ETF, trading as UFO, and the Defiance Drone and Modern Warfare ETF, trading as JEDI, both hold ASTS. UFO tracks the S-Network Space Index across 49 holdings, rebalances quarterly, and uses modified market-cap weighting, according to the fund’s April 2026 fact sheet published by Procure ETFs. EchoStar’s Class A shares represent approximately 4.26% of UFO, with a market value of roughly $45 million in the fund, per Morningstar data. UFO is up 38% in 2026; JEDI is up around 33%. Among UFO’s larger positions, Rocket Lab has surged 249% and AST SpaceMobile 159% as the space economy expanded, according to a Yahoo Finance analysis of the fund.
Concurrent demand from investors piling into those funds created what Johnson called a bottleneck of supply, keeping proxy prices elevated even as the underlying thesis stretched thin.
Options Traders Are Already Looking Past the Selloff
Friday’s price action did not shake the options market. Calls outnumbered puts in all three proxy names, with AST the most active: more than 250,000 contracts traded for more than $60 million in premium. More than twice as many calls were bought as puts in the morning session.
Danny Kirsch, head of options trading at Piper Sandler, was direct about the motivation: ‘There’s a ton of short-dated call buying in these names as a way to get long SpaceX. I have no doubt part of it is retail demand but there is definitely institutional demand for SATS.’
SATS is EchoStar’s ticker, and the company’s shares were actually up 5% in early Friday trading even as the headline drop played out. AST SpaceMobile was also trading higher at the time. The implied volatility figures give a sense of the premium traders are willing to pay: EchoStar closed Thursday at $128.13 with an implied volatility of 91; AST closed at $97.56 with an implied volatility of 126.
SpaceX options are due to begin trading on Tuesday, and Anthony Denier, group president and US chief executive of Webull, sees the demand as potentially historic. ‘SpaceX has the potential to become one of the most actively traded options names among retail investors,’ he said by email. ‘The combination of a likely high share price, significant volatility and immense public interest creates an ideal environment for options trading. If borrowable shares become scarce or expensive, put options may offer investors a more practical way to express a bearish view than shorting the stock directly.’
The context behind that share price is worth holding in mind. Reuters reported that SpaceX plans to sell approximately 555.6 million shares at $135 each, targeting a raise of $75 billion. Up to 30% of the offering may be allocated to individual investors, an unusually large retail tranche for a deal of this scale. Morningstar, in a research note cited by Reuters, placed a $780 billion valuation on the company, roughly 48% below its current private-market valuation.
There is one further wrinkle in the SpaceX story. The company’s amended registration statement, filed on 1 June 2026, included a new disclosure that it ‘may issue a significant amount of equity in connection with future transactions,’ a phrase that Wall Street observers told Fortune raises the probability that SpaceX will pursue an acquisition of Tesla.
Whether that materialises or not, Tuesday’s opening of SpaceX options trading is the next date traders are watching. If the direct route proves as popular as the proxies did, the pressure on the proxy names could accelerate in either direction.
