SpaceX share price jumps 12% in two trading sessions; what is fueling the rally?

SpaceX's share price extended its gains Tuesday amid optimism around its inclusion in the tech-heavy NASDAQ 100 index. The shares jumped 7.2% on Monday, which marked its second-best day post-listing. The shares traded near the $171 per share mark, up 4.4% on Tuesday at 9:15 pm (IST). The space exploration company made a solid debut with a $1 trillion valuation; the shares witnessed strong buying power post-listing, fuelling its rally to record high levels of $225 per share.

However, shares witnessed selling pressure last week, erasing the majority of its post-listing gains. The shares fell over 34% from the recent record highs of $225 per share to $147 per share on June 23.

Inclusion in NASDAQ 100

SpaceX shares will remain in focus this week ahead of their official inclusion in the NASDAQ 100 index after the July 6 close, and will be effective at the July 7 open. Index funds and ETFs that track the NASDAQ 100 index will be allowed to buy after the July 6 close.

Meanwhile, the S&P 500 refrained from adding SpaceX to the index as it requires a company to be profitable in the recent quarter, as well as the sum of its four most recent quarters.

SpaceX financials remain gloomy despite exorbitant valuations. The company incurred a net loss with revenue of $19 billion for the latest quarter. According to Morningstar data, the company trades at 76x price-to-sales. In comparison, NVIDIA trades at 18.8x price-to-sales and 29x price-to-earnings, and Micron trades at 15.3x price-to-sales and 27.4x price-to-earnings.

SpaceX raised $25 billion through debt

Soon after it raised close to $86 billion through its public issue, the Elon Musk-led space exploration major raised another $25 billion through debt in late June. The objective of the issue is to repay the outstanding debt under the bridge loan facility in full and to pay the related fees and expenses. It further intends to use the remaining proceeds for general corporate purposes.