On June 12, the Space Exploration Technologies Corp, a/k/a SpaceX (SPCX), launched the highest-market-value IPO in history, valuing the company at about $1.8 trillion. The current market value is $2.44 trillion.
There is a great debate among investors over whether SPCX is overvalued ($155 per share as I write this), because it trades at many multiples of current revenues and has no profits.
I think most investors want to own SPCX and get some value out of it. This will be one of the greatest companies ever, but starting with a $2 trillion valuation means there needs to be significant growth to justify it. It is important to note that as SPCX gets added to market indices , almost every investor will own some through index-tracking ETFs.
I bought a few shares on the IPO date and plan to add to them over time. I am also accumulating shares of the first single-stock covered call ETF “covering” SPCX.
The Kurv SpaceX Enhanced Income ETF (XSHP) launched on June 16, the day SPCX options started trading. Weekly options started trading on June 18.
Kurv operates six other single-stock covered call ETFs, using Amazon, Apple, Alphabet (Google), Microsoft, Netflix, and Tesla as their underlying stocks. Kurv launched these funds in October 2023, so they have an established track record. All six have solid, positive total returns, with the Kurv Yield Premium Strategy Google ETF (GOOP) leading the pack at 158% since its IPO.
Much of the return from covered call ETFs derives from dividends paid out of an option-selling strategy. The current Kurv ETFs sport yields ranging from 11.5% to 20.25%. The Kurv Premium Strategy Tesla ETF (TSLP) has the highest yield, and I suspect XSHP will have a similar yield.
Kurv pays the dividends on these ETFs monthly. XSHP will pay the first week of each month. The ETF trades for about $20 per share, so getting exposure with some nice income can be done with just a few dollars.
SpaceX IPO: What is Elon Musk Hiding?
Elon's latest SpaceX headlines aren't telling the whole story. Early investors look likely to remain underwater for some time, but for investors who dig deeper there's a monthly income stream worth thousands from one of Elon's other ventures. See Elon's hidden income play now, click here.
