Jim Cramer has cautioned Space Exploration Technologies Corp. (NASDAQ: SPCX), popularly known as SpaceX, investors about a potential market bust similar to Cerebras Systems Inc. (NASDAQ: CBRS).
In a post on X on June 10, Cramer noted the SpaceX Initial Public Offering (IPO) is drawing the same overheated demand and hype that surrounded Cerebras. Cramer stated that the Cerebras deal was a bust despite the stock being 20 times oversubscribed.
“SpaceX –4 times over subscribed. lots of money… But Cerebras was 20 times oversubscribed.. But much less money needed… Cerebras deal was a bust…remember…,” Cramer stated.
Notably, Cerebras offered 30 million shares at a final IPO price of $185 each, thereby raising $5.55 billion. During its pre-pricing roadshow, big institutions placed orders for more than 600 million Cerebra shares, hence over 20 times the supply.
On the other hand, SpaceX is targeting a roughly $75 billion raise at about $135 per share, valuing the company at nearly $1.75 trillion. However, the reported investor orders have topped $250 billion, hence leaving the deal roughly four times oversubscribed.
Cramer warns investors of a possible SpaceX bust
Cramer’s warning on SpaceX rests on what happened to Cerebras after its IPO. The CBRS stock opened at $350 on its May 14 debut and spiked to roughly $386 intraday before the momentum broke.
From its all-time high, CBRS stock fell in the subsequent days, hitting a low of around $197 in early June. With CBRS stock trading at $241.23 at press time, IPO investors are down over 30% on their capital. As such, the company had a market capitalization of about $49.81 billion at the time of publication.
With SpaceX only 4x oversubscribed, compared to 20x for Cerebras, Cramer cautioned investors about a potential post-IPO correction. Furthermore, Cramer highlighted that the SpaceX IPO has shifted funding from other markets, including Gold, Bitcoin (BTC), and stocks.
