Why Planet Labs Stock Crashed Today

So I conjecture I was some close and right astir the SpaceX (NASDAQ: SPCX) IPO.

Right, erstwhile I predicted SpaceX IPO fever mightiness thrust abstraction stocks higher this year. Indeed, shares of spy outer relation Planet Labs (NYSE: PL) are up 38% implicit the past 4 months.

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Unfortunately, I was besides close astir what would hap connected IPO day. And this, successful a nutshell, is wherefore Planet Labs banal fell 9% done 12:50 p.m. ET today.

Three scenarios for SpaceX and abstraction stocks

Four months ago, I ran down 3 theories for however the SpaceX IPO mightiness play out, some for SpaceX and for different abstraction stocks. Briefly, these scenarios were:

• Option 1: SpaceX IPO fever could marque abstraction stocks much popular, driving up their banal prices.

• Option 2: SpaceX could marque abstraction stocks not named SpaceX less popular, if they suffered by examination to SpaceX, which seemed some overmuch bigger and much profitable than SpaceX's competitors.

• Or Option 3: Investors wanting to bargain SpaceX banal mightiness merchantability shares of different abstraction stocks to rise currency to bargain SpaceX instead.

What's adjacent for Planet Labs banal

The information that Planet banal went up truthful overmuch successful 4 months means I was close astir Option 1. The information that Planet banal is selling disconnected contiguous -- the aforesaid time investors began paying for their caller SpaceX IPO shares -- suggests I was close astir Option 3 arsenic well.

And Option 2? This remains to beryllium seen. SpaceX's IPO prospectus made wide SpaceX isn't profitable arsenic we erstwhile believed -- instead, it's losing wealth and burning cash. So bigger isn't needfully better.

Planet banal whitethorn not beryllium profitable, but it is generating affirmative escaped currency flow. For that crushed if for nary other, I similar Planet banal implicit SpaceX banal today.

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