The Memo Nobody Wants to Write

INTERNAL — DO NOT DISTRIBUTE
Risk Committee | Friday Close | June 13, 2026

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To: Everyone Who Bought SPCX Above $160 Today
From: The Part of Your Brain You've Been Ignoring
Re: What We Are Actually Pricing Right Now

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Let's start with what happened, because the narrative has already been laundered through enough CNBC chyrons that the underlying logic has gone soft.

SpaceX — ticker SPCX, priced at $135 Thursday night — opened at $150 Friday morning, briefly touched $176, and closed at $160.95. A $2.11 trillion market cap on day one. The largest IPO in history raised $75 billion. Elon Musk became the world's first trillionaire before the closing bell. The Nasdaq crowd in Times Square looked like the end of a war.

Meanwhile, WTI crude fell to $84.88 — down 3.2% on the session — on reports that Trump has called off retaliatory strikes against Iran and that a diplomatic memorandum of understanding on reopening the Strait of Hormuz is "in pretty final shape" and could be signed this weekend in Europe. Brent settled at $87.25. Two-month lows. Dow up roughly 1,000 points Thursday, futures constructive through Friday. The VIX dropped to 17.68.

Everyone is happy. Two massive positive surprises landed on the same day. Fine.

Now let me tell you what this memo is actually about.

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The problem with pricing in two fantasies simultaneously is that they compound.

SPCX is not a fundamentals trade. The company posted an EPS of -$2.94 on a trailing basis. The average 12-month price target from the analysts who covered it pre-IPO was $139.33 — below where it opened. Former Nasdaq CEO Robert Greifeld said the stock is trading "not on fundamentals" but "on the aspiration of what's possible with the human spirit." That is a beautiful sentence. It is also a confession. When the chairman of the exchange where a stock debuted characterizes it as an aspiration vehicle rather than a value instrument on day one, the grown-ups in the room should not be smiling.

What SpaceX actually is: a rockets-and-satellite business with xAI stapled to its side after a February merger, a $269 million Tesla megapack purchase from its own CEO's other company disclosed in the S-1, and 82% voting control retained by one man. The governance flags were real enough that Elizabeth Warren wrote to the SEC. The SEC, predictably, reviewed disclosures, not fairness, and let the train leave the station. Goldman Sachs led the book. Of course it did.

None of this means SPCX is uninvestable. Starlink's cash generation is real. The Starship program, if it works at scale, genuinely restructures global launch economics. The bull case is coherent. But a $2.1 trillion valuation on day one, for a company losing money per share, is not a bull case — it's a crowded room with one exit. The first 30 IPOs of comparable size — Alibaba, Meta, Shopify among them — suffered within the first year. We have been here before.

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The Iran trade deserves the same skepticism, applied faster.

Oil has fallen precipitously since its April high above $114 on Brent. That drop — roughly 25% in eight weeks — has been driven almost entirely by de-escalation signals that have not, as of this writing, produced a signed agreement. Trump said the deal is "in pretty final shape." He also said in March that Iran had given the US 10 oil tankers as a "present," while simultaneously Iran confirmed it had rejected the US 15-point plan. The Strait of Hormuz, through which roughly 20% of global oil supply moves daily, has not been formally reopened.

The market is not pricing in a de-escalation. It is pricing in a done deal. Those are different things.

Here is the mechanism that matters:
Every $10 decline in oil prices removes approximately 20 basis points from US headline CPI. Oil down $25 from peak removes 50 basis points. That is material. The 10-year Treasury was at 4.477% on Friday. The 2-year at 4.075%. CME FedWatch has a 97% probability of a hold at next week's FOMC. But — and this is the number that should be tattooed somewhere visible — the probability of at least one rate hike by December 2026 is sitting at 70%. The persistence of headline inflation, even before the Hormuz disruption, has already reframed the Fed's forward guidance.

If the Iran deal holds and Brent stays below $88, that 70% gets repriced lower. Powell gets to hold indefinitely. The equity market rally becomes self-reinforcing, and the SpaceX IPO window stays open for OpenAI and Anthropic to follow.

If the deal frays — if this weekend's signing in Europe doesn't materialize, if Iranian hardliners walk it back Monday morning — oil snaps to $100 inside 48 hours. The Hormuz risk premium never left. It was suppressed. And suppressed risk premiums have a way of releasing all at once.

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The University of Michigan's June consumer sentiment ticked up 9% this month, driven largely by lower gasoline prices and particularly strong for lower-income households, for whom the fuel pump is a more immediate feedback mechanism than the S&P 500. That's a real data point. People feel better when gas is cheaper. But sentiment is still 13% below January 2026, and 19% below a year ago. The relief is real. The recovery is not.

May's S&P 500 gained 5.26%, the Nasdaq 8.43%. Technology jumped 19.76% and did almost all of the index's heavy lifting — eight of eleven sectors actually fell. Strip NVIDIA and Micron out of tech earnings and Q1 sector growth drops from 54.3% to 30.1%. Strip Alphabet from Communication Services and 48.9% growth inverts to a 4.1% decline. The breadth problem didn't go away because SpaceX started trading. It got more compressed.

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What this memo is actually recommending:

Nothing. Risk committees don't recommend things on days like this. They document the conditions under which the thing that happened was possible so that, when it unwinds, someone can point to the file and say we knew.

We knew that SPCX was priced on aspiration, not earnings.

We knew that the Iran deal was a headline, not a treaty.

We knew that 70% implied probability of a December hike was sitting beneath a market celebrating a rate hold.

We knew that the breadth was thin, the VIX was at 17, and everyone was positioned the same way.

Have a good weekend.

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This memo was not written by anyone. It does not represent the views of any institution. It will not be found in the file.