Why Kyle and Melvin bought SpaceX at $156

GM. This is Milk Road AI, the newsletter entering the SpaceX discourse despite the multiple warnings.

The time is finally here. 2 out of our 5 analysts bought SpaceX last night. In this edition, we’re breaking down the thesis behind each of their moves.

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TWO OF OUR ANALYSTS JUST BOUGHT SPACEX 🚀

As I scroll on X, all I see is bearish sentiment on SpaceX:

Source: @Barchart

Source: @NoLimitGains

But our analysts aren't buying into the fear.

Kyle Reidhead (the big boss over here at Milk Road) just bought SpaceX at $156 with a simple thesis:

“I am short-term bullish, medium-term bearish and long-term bullish on SpaceX.”

His short-term thesis comes down to one number: 4.2%.

Only 4.2% of the $SPCX supply is available to be traded right now.

That's an unusually tiny amount. And when the float is that low, you need an overwhelming number of sellers to push a stock down hard.

Kyle believes this supply dynamic alone could help drive SpaceX back toward $200+ over the coming weeks.

Source: Tokenomist

Now onto why he’s medium-term bearish:

On August 5th, 11% of the shares will be unlocked. More supply hitting the market means more potential sellers and Kyle expects that to put real downward pressure on the price.

His plan is simple:

Take advantage of the near-term setup and then look for a better entry once the unlocks hit.

He thinks a $2T market cap is hard to justify right now and the medium-term setup will likely give him a better entry.

But long-term, he remains extremely bullish. SpaceX is building infrastructure that has no real competition and he plans to make it a large position in his portfolio over time.

Our other analyst (Melvin) also bought SpaceX yesterday but he's focused almost entirely on the long-term opportunity.

Here’s his bull case:

SpaceX is not just a rocket company.
It's building across launch, satellites, broadband, defense, AI compute, power, and manufacturing.
Reusable rockets cut launch costs to a level no competitor has come close to matching.
Starlink is a global broadband network that no other telecom can copy, because no other telecom owns the rockets that put it up there.

Phase 1 was reusable rockets. Starlink was Phase 2 and Melvin thinks AI compute and orbital infrastructure will be Phase 3.

“My minimum price target is $225-250 by the end of the year, and honestly, I would not be shocked if we run above that if execution keeps trending in the right direction.”

(Side note: Do you wanna be like Melvin who continues to make incredible calls for Milk Road? We’re hiring an Investment Analyst to share stock, crypto and AI picks with millions of investors. Apply here.)