Don’t Blow The SpaceX Pre-IPO Like I Did

Trading the Pre-IPO SpaceX perp could’ve been so great, but alas a slight misunderstanding of an esoteric concept called “re-basing” torpedoed the best theoretical return we’ve published this year. We expect a lot of high-flying IPOs this year, so there will be plenty of opportunities to profit from these pre-IPO perpetual swap markets.   Here’s how to avoid the same mistake next time. Anthropic is right around the corner.

A Fattah Missile Hits the Iron Dome  On June 9th, I saw the above prices on Binance, Aster, Bybit, Hyperliquid and OKX. I immediately wrote up a trade ideation for a risk free spread trade. We like to publish to existing CoinRoutes’ clients a “trade of the week” idea, when something presents itself.   We would have hypothetically entered buy orders on OKX and Hyperliquid at $156.05 and shorts on Binance and Aster at ~$169 (I say “hypothetically” because CoinRoutes’ has no prop trading or ability to profit from trades). This would have been the spread trade of a lifetime, happily locking in a $13.50 entry price basis, with virtually no risk. I was overjoyed when the next day I saw a $6.70 gain on Hyperliquid and OKX and what looked like a large gain on my Binance and Aster shorts. Little did I realize that the price move lower was the result of Binance and Aster “re-basing” the price by 10%, which meant I had actually shorted closer to an unrealized price of $154.50, instead of the published price on June 9 of ~$169.95, so the short actually lost about $7.79, and my imagined ~$13.50 spread profit came out a loss.   My single-day imagined profit of 115% had exploded like a Fattah missile shot down over the desert.    What is Re-Basing and Why Did It Take All My Money?   Re-basing is when a listing exchange decides to re-price the contract, as a binary event, based on a published change by the issuer, in the total share count (ie. “float”). When SpaceX made an SEC filing to disclose a final (and higher) share count, every crypto exchange that lists a pre-IPO perpetual has to decide how to account for the total higher float. When Elon Musk decided, that as a man of the people, he wanted to offer more shares to retail investors and increased the total share count to sell more shares to the general public, that forced the exchanges to make a decision on how to deal with the dilutive effect of the extra share count. Re-pricing the contract based on extra shares is a binary event, which is called a re-base. Most centralized exchanges did this. Hyperliquid, notably, does not, by policy, aligning themselves more with existing shareholders. Which side you’re on — long or short — and the exchange where you’re holding the position, will determine if you take an instant loss, gain, or no effect.

The Pre-IPO Quick Math (I usually skip this part…whoops)

A pre-IPO perp prices per share as valuation ÷ share count. Since the real count isn’t public until the prospectus, every venue launches on an estimate — originally about 11.87 billion shares for SpaceX.

When the June 3 filing revised that up to ~13.08 billion (+10%), the per-share price had to fall ~9% even though the company’s value hadn’t changed.  More shares, same sized pie, smaller slice.

Longs Get Punished and Shorts Win… Sometimes

Dilution pushed the SpaceX perp per-share price down ~9%. What happens afer that move depends on the exchange.

• On a venue that does not rebase aka Hyperliquid, the markdown is a real price decline. A long absorbs it; a short banks it.

• On a venue that does rebase, aka everyone else, the markdown is offset by the contract-sized increase. Neither longs nor shorts experience a PnL change — it is a non-event.

Important But Boring… Re-Basing Logic Exchange by Exchange

Hyperliquid (via Trade.xyz) never re-bases — it priced the June 3 dilution event straight into the market price, instantly rewarding shorts and punishing longs. This is similar to how existing shareholders (founders, employees, etc) of SpaceX experienced the event, realizing dilution, even though the effect on price was not immediately noticeable.    Aster reserved the right to de-base, and used it, on June 10, alongside Binance, causing no impact whatsoever to position value for holders of either longs or shorts. Exactly how most centralized exchanges deal with the re-basing.

How SpaceX Contracts Repriced After the Dilution Event

The Takeaway

If you’re long and want protection from the risk of an upward share-count revision, use a venue that rebases.  If you’re short and want to harvest dilution or premium compression, use Hyperliquid.  Always check the exchange website for announcements on the dates of the re-basing. If no announcement, they haven’t done it yet, but they still might.     About CoinRoutes  CoinRoutes is a multi-asset institutional trading technology platform providing OEMS and EMS solutions, algorithmic trading, smart order routing, portfolio management, and risk management across digital assets, equities, foreign exchange, commodities, and tokenized assets. Hedge funds, asset managers, market makers, proprietary trading firms, family offices, and institutional investors rely on CoinRoutes to access global liquidity, automate execution, and manage risk across multiple asset classes.