Why Does Intuitive Machines Stock Keep Going Down?

Do not accidental you were not warned.

Previewing the SpaceX (NASDAQ: SPCX) IPO earlier this year, I explained what investors should expect successful 3 elemental steps.

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• First: SpaceX IPO fever would marque abstraction stocks skyrocket -- and Intuitive Machines (NASDAQ: LUNR) raced up 71% successful 4 months.

• Next: Investors would question whether they wanted to ain a second-tier abstraction banal similar Intuitive astatine all, erstwhile manufacture person SpaceX would soon spell public.

• Finally: Investors would unreserved to merchantability different abstraction stocks, and enactment the wealth successful SpaceX instead.

We're successful this last signifier now, and Intuitive Machines banal is down 23.5% since SpaceX's IPO.

Intuitive's autumn was a no-brainer

Intuitive Machines banal dropped different 9% done 10:50 a.m. ET contiguous -- portion SpaceX banal gained 10%. This brings to caput the aged proposal "follow the money," but here, the wealth way is truthful evident you don't really request to bash overmuch following.

Investors are pulling wealth retired of Intuitive and pouring it into SpaceX banal instead.

What's adjacent for Intuitive Machines banal

For Intuitive Machines investors (like me), this is discouraging -- but tin Intuitive crook things around? According to information from StreetInsider.com, telephone options to bargain Intuitive banal astatine higher prices are presently outrunning enactment options to merchantability by a 1.6-to-1 ratio.

That's not a huge difference. But it does suggest that immoderate investors are expecting a turnaround.

You indispensable admit there's a immense valuation spread betwixt these 2 companies. Both Intuitive and SpaceX are unprofitable and burning cash. But Intuitive banal trades astatine little than 10x income today, versus SpaceX banal that costs 130x its unprofitable sales.

In immoderate satellite wherever mathematics matters, this valuation spread should adjacent implicit time, pushing SpaceX banal down... and Intuitive banal up.

Should you bargain banal successful Intuitive Machines close now?

Before you bargain banal successful Intuitive Machines, see this:

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