June 16 (Reuters) - Shares of Elon Musk's SpaceX rose more than 10% in premarket trading on Tuesday, putting the company on course to overtake Amazon.com in market value to become the world's fifth‑largest company, as it extended a post-IPO rally.
The stock was last up 10.4% at $212.50, jumping more than 57% above its $135 IPO price and giving the company a market capitalization of nearly $2.8 trillion if gains hold. Amazon's valuation, meanwhile, stands at $2.66 trillion.
"We can say with certainty
that this valuation makes absolutely no sense today. People are buying SpaceX in the expectation that others will buy too and push the price higher - that's speculation," said Ipek Ozkardeskaya, senior market analyst at Swissquote Bank.
The company reported sales of $18.67 billion last year and a net loss of $4.94 billion after merging with money-losing xAI -- in contrast to many of Wall Street's big technology companies that have posted bumper numbers.
SpaceX options activity is set to begin as soon as Tuesday, with early activity expected to be heavy, volatile and likely expensive.
Analysts and portfolio managers said investors should brace for volatility, particularly early on in SpaceX's life as a public company, due to its relatively small float and high valuation.
The rally could continue as SpaceX is set for fast-track inclusion in the Nasdaq 100, which will soon make it a major holding for passive funds and ETFs that track the index, creating a fresh source of demand for its shares.
FTSE Russell and MSCI are also set to add the stock to their indexes, effective June 26 and June 29, respectively.
SpaceX also said on Monday that its underwriters had exercised the "greenshoe" option to purchase additional shares, increasing the total proceeds from its initial public offering to $85.7 billion from $75 billion that it raised last week.
More than $1.76 billion worth of SpaceX shares exchanged hands as of 05:02 a.m. ET, which was several times the trading volumes in Nvidia, Microsoft, Tesla and Apple combined.
Other heavyweight technology stocks, including Nvidia and Alphabet, were trading slightly lower. Tesla was down 1.5%.
(Reporting by Shashwat Chauhan in Bengaluru; Editing by Nivedita Bhattacharjee and Shinjini Ganguli)
