SpaceX’s IPO will also be a massive selling event triggering big price dislocations across the stock market as investors dump shares to buy SPCX

The largest initial public offering ever is just days away, and demand for Space X stock is expected to be extremely high, with Wall Street clamoring to buy Elon Musk’s rocket and satellite company. The flip side of all that buying is plenty of selling as investors need to raise cash for stock purchases by liquidating other shares in their portfolios. To be sure, IPOs are often accompanied by volatility. But Greg Boutle, head of U.S. equity derivative strategy at BNP Paribas, pointed out in a note Friday that what’s different this time is SpaceX-related volatility will be coupled with the largest market cap ever seen in a U.S. IPO. SpaceX plans to raise at least $75 billion in its IPO by selling over 555 million shares at $135 a piece, valuing the company at more than $1.75 trillion. If underwriters exercise options for additional allotments to meet high demand, proceeds could grow to $85.7 billion. The IPO is expected to price Thursday evening, with shares trading Friday on the Nasdaq under the ticker SPCX. “We think many of the standalone SpaceX flows might be digestible. The problem is that many of these flows are potentially same-way and additive,” Boutle explained. “With the SpaceX free float reported to be close to $75bn on IPO, it’s easy to see how $30bn of passive buying, a retail investor chase, and levered ETF and option flows collectively could quickly become challenging for the stock’s liquidity. If all are chasing to buy (or sell) at the same time, the risk of price dislocation becomes much greater.” SpaceX has long been one of the most highly valued startups after taking over the space industry since its founding in 2002. It claimed more than 80% of global rocket launches last year and has over 10,000 Starlink satellites in orbit, providing space-based internet connections to businesses and militaries. While S&P Dow Jones Indices chose not to change its rules to accelerate inclusion of SpaceX in the S&P 500, rules for