The SpaceX IPO Just Exposed Wall Street’s New Playbook, Says Mike Green
SpaceX's retreat despite early entry into passive funds is worrying, says Mike Green
By Zack Guzman
July 10, 2026
The SpaceX IPO may look, on the surface, like another story about retail investors piling into a hot name at the top.
But to Mike Green, Chief Strategist at Simplify Asset Management, the real story is bigger than whether the stock traded down after its initial surge. In his view, the IPO revealed something far more important about the modern market: Wall Street may have found a new way to use index demand, passive flows, and speculative leverage to turn retail enthusiasm into liquidity for insiders.
That, Green argues, is why the deal should not be judged only by the investors who bought near the highs and watched the price fall. It should be judged by who the transaction actually served.
“If you look at the SpaceX IPO under anything other than where it traded at its peak in the immediate aftermath of the IPO, this has been an unbelievably successful IPO,” Green told Coinage in a wide-ranging interview. “I think this has actually gone spectacularly well, except of course, for the small retail investors who piled in at the extraordinary heights near $200. And the reality is, is that — it’s a terrible way to say it — but nobody cares about them.”
Maybe a bit harsh, but fair. SpaceX shares closed at $160 on the company's first day of trading, but are now about 7% below that at $147 nearly a month later.
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Interestingly, the modern IPO machine is often discussed as a way for everyday investors to gain access to high-growth companies. But Green points out that incentives have entirely flipped. By the time the most coveted private companies reach the public market, the largest gains may have already accrued to founders, employees, venture investors, and institutions. Retail investors no longer necessarily get anything close to the same access they once did. Now, they may just be providing the exit.
What makes the SpaceX example more important, in Green’s view, is something he has been warning investors about frequently: The role of index funds and passive demand in modern markets. The biggest shift in markets over the last generation has not simply been the rise of mega-cap tech or the growth of retail trading. It has been the enormous movement of capital into passive vehicles that buy stocks according to index rules rather than traditional valuation work.
In a world where enough money is forced to buy the same containers, the question becomes less whether a stock is cheap or expensive and more whether it is eligible for flows.
“The really critical part of this is not actually the SpaceX IPO or the SpaceX stock price as much as it is that we have now discovered that index funds can be used as tools to facilitate the exit of insiders and liquidity associated with it,” Green said.
Nasdaq made an exception to its three-month waiting period to provide SpaceX fast entry into its Nasdaq-100 index just after 15 days. SpaceX was also included early in the Russell 1000, while S&P did not make any special exceptions.
Now, Wall Street has its mega-IPO case study.
“It's very hard for me to imagine that this is going to turn into a moment for internal reflection and soul searching on the part of Wall Street because people have lost money from $200 to $160,” Green said. “I just don't see that happening. If anything, I see the teams lining up to say, you know, how can we get more stuff done this way because it's very profitable.”
The crypto market has already seen versions of this dynamic in more extreme forms. Prices can appreciate tremendously for tokens or shares when there is only a minuscule public float, paired with perpetual futures and 100x leverage. As perpetual futures make their way to equities beyond SpaceX, Green speculated on the impact of synthetic demand far beyond the amount of actual capital traders put down.
“Perpetual futures offering extraordinary leverage allow me to use $1 to buy $100 worth of something," Green said. "That type of innovation ... to buy more of something is simply a way of synthetically increasing aggregate demand. It is very natural to expect that to lead to an increase in prices and a subsequent increase in supply."
“This is being done to facilitate the creation of liquidity for the insiders,” Green said. “It is not being done for the benefit of the investors.”
What's interesting is that the same effect is likely to come from crypto's additional major innovation — tokenizing equities to offer stock exposure to traders outside the U.S. That dynamic will also likely continue to increase demand for U.S. tech shares.
“Simply the mechanism of the shift to passive appears to be adding close to 18% a year to the US equity markets,” Green said, noting he remains optimistic that passive flows will continue to boost stocks through the back half of the year. “We're up 9% and I think ultimately we'll probably get another 10% as it relates to the passive flow.”
But that is also a potential cause for concern. If markets are rising because money is mechanically flowing into passive containers, then higher prices do not necessarily signal better fundamentals. They may simply reflect more dollars being shoved into the same structure.
“Unfortunately, that's tinged with, as you can tell, a note of sadness because this is not actually investing,” Green said. “This is simply money being shoved into a container and the container being forced to expand to the quantity of money that is being shoved into it. And it means that there is an extraordinary amount of pain that is eventually going to emerge because of it.”
And that is why SpaceX matters — not just because a hot IPO traded down. But because, in Green’s telling, the deal showed how powerful the new market structure has become.
Public markets were once treated as a venue for price discovery. Increasingly, Green argues, they are becoming an exit liquidity engine.
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