SpaceX surpasses Amazon as its post-IPO surge continues.

      SpaceX's valuation has surpassed that of Amazon, at least for the time being. On Tuesday, shares of the rocket company surged over 10%, continuing a trend that began with its market entry and positioning it to become the fifth most valuable publicly traded company in the world, just four trading days after its debut.

      According to Reuters, the stock rose by 10.1% to $211.80, translating to a market capitalization of nearly $2.8 trillion if the gains are sustained. In comparison, Amazon's valuation stands at $2.66 trillion.

      This increase followed a remarkable 19% rise on Monday, which was the first full day of trading after a debut that marked the largest initial public offering ever attempted.

      The statistics behind this rally are intriguing and warrant further examination. The trading volume for SpaceX shares exceeded $1.16 billion, reported by Reuters to be several times greater than the combined volumes of Nvidia, Microsoft, Tesla, and Apple. A newly public company outpacing four of the most actively traded stocks on the market is uncommon for the Nasdaq.

      This situation primarily stems from scarcity. SpaceX's IPO only released about 4.2% of the company's shares, escalating to around 4.9% once underwriters fully exercised the greenshoe option.

      Consequently, there is a very limited free float available, which, combined with strong retail demand, creates a supply-demand imbalance capable of significantly impacting the share price in either direction. A small float can be beneficial during price increases.

      The initial valuation was already notable. SpaceX set its IPO price at $135 per share, leading to a valuation of $1.75 trillion and raising $75 billion in what TNW and others described as the largest listing on record.

      The stock attracted interest from retail investors globally, with $2.2 billion coming from Japanese buyers alone, reflecting the widespread demand prior to the first share being traded.

      The current valuation hinges on a business with one key profit generator and several costly ventures. Starlink, SpaceX’s satellite-internet division, accounted for most of the company’s revenue and virtually all of its operating profit last year, even as its growth metrics have become more challenging and average revenue per user has declined.

      Starship and the xAI projects continue to be capital drains, as investors are anticipating years of growth yet to materialize.

      For Elon Musk, the financial implications are personally significant as well as corporate. The listing has endowed him with a paper wealth substantial enough to label him a trillionaire, and he, along with other insiders, retains voting control of the company intact post-IPO. Tuesday’s increase boosts that paper total, although "paper" is the operative term while the float remains minimal.

      Whether SpaceX will maintain its position in fifth place will depend on the closing bell rather than the premarket figures. A stock capable of rising 19% in a day with such a limited number of shares can just as easily reverse those gains under similar conditions. For now, a company that was private only a week ago is now trading just behind Amazon, while the market continues to assess its true worth.