SpaceX leveraged fund providers hit by day-one launch setback, sources say

Asset managers aiming to launch leveraged exchange-traded funds (ETFs) linked to SpaceX’s highly anticipated IPO were instructed to delay their debut until Monday, four sources confirmed. The decision, announced by exchanges on Wednesday, follows SEC concerns that coupling leveraged ETFs with SpaceX’s Nasdaq market debut could create complications. The delay prevents traders from capturing potential first-day price spikes in SpaceX’s stock, while managers like Tradr ETFs—planning 2x long and 2x short products—will now debut on Cboe Global Markets. The setback affects firms that had hoped to align their ETF launches with SpaceX’s trading start, as leveraged funds tied to the company could collectively hold over $10 billion in assets. Matt Markiewicz, head of product and capital markets at Tradr ETFs, noted the significance, stating that the products ‘could end up holding a total of more than $10 billion.’ While no precedent exists for leveraged funds launching alongside an underlying stock, asset managers had sought to capitalize on early demand. Major players like Direxion, GraniteShares, ProShares, and Defiance had planned to introduce 2x leveraged long ETFs as soon as permitted, according to SEC filings and promotional materials. Simeon Hyman, global investment strategist at ProShares, emphasized that investors will still have multiple ways to gain SpaceX exposure, either through passive index providers, the stock itself, or leveraged ETFs. ProShares has no plans to launch early and will wait until Monday to ensure the IPO proceeds smoothly. The SEC did not respond to requests for comment, while Nasdaq declined to address the issue. Cboe Global Markets and the New York Stock Exchange could not be reached immediately. Analysts, including Todd Sohn of Strategas, highlighted the billions at stake in the first weeks of trading, underscoring the competitive race among asset managers to capture investor interest in SpaceX’s market debut.