3 Stocks To BUY HEAVY During SpaceX Dip

Key Concepts

• Float: The number of shares available for public trading.
• Lock-up Period: A contractual restriction preventing insiders from selling shares for a specific period after an IPO.
• Index Inclusion: The process where major indices (e.g., NASDAQ 100, Russell 1000) add a stock, forcing institutional funds to buy shares.
• Price Discovery: The process of determining the "true" market value of a stock after initial IPO volatility.
• Insulin Pump Market: A medical device sector characterized by high barriers to entry, complex technology, and significant untapped potential in the Type 2 diabetes population.
• "Almost Pumpers": A target demographic of patients who desire the benefits of insulin pumps but are deterred by the complexity and cost of current market offerings.

---

SpaceX: Market Dynamics and Outlook

1. Why SpaceX Stock is Volatile

The speaker attributes the post-IPO volatility to three primary factors:

• Microscopic Float: Only 4–5% of shares are currently available for trade. This low supply causes massive price swings, allowing a $2 trillion company to move like a small-cap stock.
• Supply Wave: A "tug-of-war" exists between forced buying from index funds and the impending release of locked-up insider shares.
• Overvaluation: The IPO price ($135) and subsequent run-up to $225 were driven by scarcity rather than fundamental valuation, leading to a necessary correction.

2. The "Two Forces" Framework

• Force 1: Forced Buying: Institutional funds tracking indices (Russell 1000, NASDAQ 100) are required to purchase shares on a staggered schedule (June 19–July 6). This creates artificial demand for the limited float.
• Force 2: The Unlock: Starting in August, waves of insider shares become eligible for sale. The speaker notes that by September, up to 44% of the company could theoretically be unlocked, potentially increasing the tradable float by 900%.

3. Valuation and Buy Targets

The speaker suggests that the best "alpha" will be found after the "dumping cycle" stabilizes.

• $150: Expected support after index-buying fades.
• $135: The IPO price and critical psychological floor.
• <$120: The "discount zone" where the speaker sees high potential for entry.
• $100: The long-term "Elon Musk premium" floor.

---

Space Sector: Three Stocks to Watch

The speaker identifies three companies that have been oversold due to capital shifting toward the SpaceX IPO:

1. Redwire (RDW): A "picks and shovels" play involved in solar arrays, antennas, and in-space manufacturing.
   • Key Stats: Q1 revenue up 58% YoY; $500M backlog.
   • Buy Levels: $12 (current), $10 (next shelf), $8–$9 (deep value).
2. AST SpaceMobile (ASTS): Building a space-based cellular network for direct-to-phone connectivity.
   • Key Stats: 60+ mobile operator agreements; $1.2B backlog; $3B cash position.
   • Buy Levels: $70 (current), $55 (prior base), $45 (deep value).
3. Rocket Lab (RKLB): A vertically integrated launch provider.
   • Key Stats: Q1 revenue up 63% YoY; $2.2B backlog; Neutron rocket launch catalyst in Q4.
   • Buy Levels: $90 (current), $75 (prior base), $50 (deep value).

---

Sponsored Segment: Modular Medical (MOD)

1. The Problem

Despite insulin pumps being the "gold standard" for glycemic control, adoption remains low (only 1/3 of Type 1 and 8% of Type 2 patients use them). Barriers include high costs, complex interfaces, and the need for "super-user" technical skills.

2. The Solution: The Pivot Pump

Founded by the creator of the T-Slim, Modular Medical aims to capture the "almost pumper" market.

• Design: A 90-day reusable patch pump with a 3-day disposable cartridge.
• Simplicity: No external controller, no nightly charging, and mobile app-based management.
• Cost Efficiency: 50% lower cost of goods than leading competitors, utilizing high-volume automated production.

3. Market Strategy

• Targeting: Focusing on the 2.88 million Type 2 insulin-dependent patients, a segment largely ignored by current pump manufacturers.
• Distribution: Targeting primary care physicians (PCPs) who manage 25% of diabetes patients but are currently underserved by traditional pump sales reps.

4. Risks

• Development Stage: Minimal revenue and reliance on a single product (Pivot).
• Competition: Facing established giants like Tandem, Medtronic, and Insulet.
• Dilution: High R&D and commercialization costs will likely require future equity raises.

---

Synthesis and Conclusion

The video presents a cautionary outlook for SpaceX in the near term, emphasizing that the "IPO hype" and low float have created an unsustainable price environment. Investors are advised to wait for the "unlock" periods in August and September to find better entry points. Conversely, the space sector at large offers long-term value in companies like Redwire, AST SpaceMobile, and Rocket Lab, which are currently trading at a discount. Finally, Modular Medical represents a high-risk, high-reward play in the medical device space, betting on the simplification of diabetes management to expand the total addressable market.

Disclaimer: The speaker emphasizes that all investments carry risk and encourages viewers to perform their own due diligence.