Australian fund managers have been left nursing significant losses following a period of intense volatility in shares of Elon Musk’s aerospace venture, SpaceX. After an initial surge of nearly 70 per cent post-June 12 debut, the New York-listed stock concluded July down 46 per cent, impacting local fund houses. SpaceX, founded by Elon Musk, is a leading aerospace manufacturer and space transport services company, also developing satellite internet services and artificial intelligence applications.
Pengana Capital’s ASX-listed Private Equity Trust, with SpaceX as its largest position at about 17 per cent, saw its value plunge over 10 per cent in July. Pengana attributed this sell-off to concerns surrounding the August 6 lock-up expiration, which allowed early investors to sell millions of shares. Pengana reassured investors that fears appeared “overdone” as the stock has since surged 35 per cent, climbing back above its $US135 IPO price. The firm expects continued volatility but maintains a “compelling” long-term investment case.
The August 6 lock-up marked the largest of nine planned stages, with 911.5 million shares becoming available. Subsequent 7 per cent blocks are set to be released over the coming months, culminating in the unlocking of Musk’s 6.4 billion shares in June 2027. Stephen Innes, global strategist at Quintex Intel, noted, “Before August 6, the market treated every unlock as an approaching supply shock. Now the first one has been stress-tested and absorbed, but that does not mean future selling cannot overwhelm the market.”
Other Australian funds also felt the impact. Hyperion Asset Management, holding a $US201 million SpaceX position, saw its Global Growth Fund decline 8.2 per cent in July. Munro Partners’ Global Growth Fund fell 11.1 per cent, while Contrarius Investment Management’s $3.2 billion Global Equity strategy, with a 5 per cent SpaceX position, slumped 16.4 per cent. Retail investors in rocket-themed exchange-traded funds also suffered, with Global X’s Space Tech ETF and Betashares’ Space Industry ETF tumbling approximately 30 per cent and 29 per cent respectively in July.
