2x Long and Short Products Ignite Bull-Bear War

In terms of product design, ProShares plans to launch the ProShares Ultra SpaceX ETF, which aims to deliver twice the daily return of SpaceX stock. Meanwhile, Themes’ Leverage Shares is also introducing the 2X Long SpaceX Daily ETF and the 2X Short SpaceX Daily ETF, offering double-leveraged long and short exposure to SpaceX shares, respectively. These products typically achieve leveraged exposure via derivatives rather than by simply holding the stock itself.

However, leveraged ETFs are not suitable for long-term holding by retail investors. As 2x long and 2x short products track daily performance, long-term holding is impacted by compounding effects, volatility decay, and daily rebalancing. If SpaceX’s stock price exhibits sharp volatility post-listing, investors may incur significant losses due to path dependency, even if their directional outlook is correct. Risks are especially high for 2x short ETFs in the event of a short squeeze or sentiment-driven rally during the early stages of a hot IPO.

Institutions bullish on SpaceX primarily focus on three main themes: first, Starlink’s commercialization capabilities; second, the cost advantages brought by reusable rockets; and third, the long-term potential arising from the integration of space infrastructure and AI.

Starlink is currently SpaceX’s most tangible commercial asset. Compared to long-term narratives such as Mars colonization and Starship voyages, satellite internet has already established a real revenue stream. As global user numbers grow, Starlink can serve not only the remote broadband market but also secure higher-value contracts in aviation, maritime, military communications, and enterprise networks. Bullish institutions view Starlink as a global low-Earth orbit (LEO) communications operator, with a business model closer to a high-growth tech platform than traditional aerospace operations.

Notably, SpaceX has established a significant lead in the field of reusable rockets. The high-frequency launch and reuse capabilities of the Falcon series provide the company with cost advantages in commercial launches, government contracts, and satellite deployment. For bulls, this is not just a rocket company, but a platform-based enterprise that controls low-cost space transportation. If the Starship system matures in the future, SpaceX could further reduce the marginal cost of entering space, thereby unlocking even greater commercial potential.

Meanwhile, the market is layering narratives such as AI, orbital data centers, deep space exploration, and defense technology onto SpaceX. Although these businesses are still in their early stages, investors in the current U.S. stock market are willing to pay high valuation premiums for platform-level future technology companies. Long-term investors like Cathie Wood tend to view SpaceX as a disruptive technology platform rather than merely a traditional aerospace manufacturing firm.

The core view among bearish institutions is that while SpaceX is a great company, its IPO valuation may have already priced in several years of future growth. Morningstar’s fair value estimate is significantly lower than the IPO price, reasoning that the current valuation assumes extremely optimistic market share, technical success rates, and profitability pathways.

First, SpaceX’s valuation is extremely high. According to market reports, its IPO valuation is nearing $1.75 trillion to $1.8 trillion, which is close to the market cap range of the world’s largest tech companies. The issue is that while SpaceX has a powerful narrative, the company still faces high capital expenditures; Starship, satellite deployment, AI infrastructure, and deep space projects all require continuous investment. If future cash flows cannot quickly cover capital expenditures, the high valuation will face repricing risk.

Second, there is still high uncertainty regarding Starship and long-term space commercialization. Bulls see Starship as a revolution in space transportation, while bears believe its technology, regulation, safety, and cost curves still need time for validation. If Starship testing is delayed, regulatory scrutiny intensifies, or commercialization occurs slower than expected, the market may reassess SpaceX’s growth assumptions.

Furthermore, Elon Musk himself is both a source of premium and a source of risk. SpaceX benefits from Musk’s technical vision and capital appeal, but it may also be affected by his governance style, external controversies, and the distraction of managing multiple companies. For large institutions, SpaceX will need to face stricter disclosure, governance requirements, and quarterly earnings pressure after going public; uncertainties tolerated in the private market could be magnified in the public market.

The emergence of 2x leveraged long and inverse ETFs suggests that SpaceX’s stock performance after its listing may be determined not only by fundamentals but also by trading structures. Leveraged long ETFs will attract momentum-chasing capital during rallies, while inverse ETFs will amplify bearish bets during downturns.

In the short term, if SpaceX delivers a strong debut, 2x leveraged long ETFs could attract further capital inflows, driving sentiment-driven trading where investors buy more as prices rise. Conversely, if the stock price falls below its offering price or the market begins to question its valuation, 2x leveraged inverse ETFs could become a concentrated vehicle for bearish capital, exacerbating downward correction pressure.

This content was translated using AI and reviewed for clarity. It is for informational purposes only.