My 12-year-old brother runs a lemonade stand (profitable, 80% margins, no debt. Easily in the top 1% of WSB members & mentioned 'investments'). Yesterday, a 65-year-old woman - let's call her Grandma or Ethel (whichever one I am feeling atm) - told him to invest in SpaceX because it would "go up 40% and he could sell before the crash."
Ethel did not elaborate. Ethel did not cite sources. Ethel paid $2.00 for lemonade and left.
Many of you might be thinking "what if i just ride up the retail wave and sell before it crashes?"
This is proof that you will not get the 40%. You never get the 40%. The 40% is not for you.
Grandma is not an oracle. Grandma is a indicator. When a 65-year-old woman is discussing SpaceX price targets at a child's lemonade stand, that means the hype has fully saturated every layer of society, from institutional analysts down to suburban grandmothers making small talk while buying lemonade. That is not the beginning of a trade. That is the end of one. The smart money got in years ago. Grandma heard about it from her son-in-law at Thanksgiving. *You are hearing about it now. You are last.*
This is the oldest signal in markets. **Joe Kennedy famously got out of the market in 1929 when his shoeshine boy started giving him stock tips. The logic is simple: once everyone knows, there is nobody left to buy.** The whole trade only works if there are greater fools behind you. Grandma is not the greater fool. **Grandma is the GREATEST fool.** Evidence that the greater fool pipeline has been exhausted and you are standing at the end of it. **You. Are. The. Greatest. Fool.**
You really think you can outsmart the market? By the time SpaceX IPOs, early investors will have already made 50-100x in the private markets. Andreessen, Fidelity, sovereign wealth funds — these people bought in when the valuation was in the billions. They do not need Grandma to tell them anything. They have been waiting for Grandma. Grandma showing up means the moment is here. The IPO is not being done because SpaceX needs the money. It is being done because the people who own SpaceX have decided it is time to sell, and they need enough buyers to absorb $80-100 billion in paper gains. That buyer is you. Grandma is just confirmation that enough of you exist.
The pop will happen. Stock opens 25-40% up, CNBC runs a segment, Elon posts a rocket emoji. Your coworker who has never opened a brokerage account will ask you how to buy SpaceX. That coworker is the last buyer. You, buying before your coworker, are the second to last buyer. Congratulations on your placement.
If you're lucky the stock trades sideways for a bit. If you're unlucky (*you are)* it shoots straight down post IPO, right after the algorithms sell the shares they bought immediately after open. Then the lockup expires and the people who actually made money start distributing into every dip buyer and diamond hands guy who shows up. That's you. **You are the exit liquidity.** Grandma did not create this situation. Grandma is the sign on the highway telling you the exit is coming up.
The lemonade stand operator took Ethel's $2.00 and bought a Pokémon pack. He is not exposed. He is liquid. He heard the same thing you heard and made the correct decision.
**TLDR:** Ethel isn't smart money. Ethel is the signal that smart money is already gone. 🐻🍋
**Positions:** Long 200 cups of lemonade at an average cost basis of $2.10 (got roped into a premium) & 10 ethel opinion put contracts
**Disclaimer:** Not financial advice, I wouldn't touch the IPO with a ten foot pole.