Unless you’ve completely tuned out of the investing world (and that’s really hard to do this year amid the AI revolution and the extension of this great bull market, with all the big-name initial public offerings, or IPOs, to come), you’ve probably heard a lot about whether or not you should punch a ticket to Elon Musk’s SpaceX or Space Exploration Technologies (TSX: SPCX), as it’s referred to in its full name when you go looking for the stock but can’t quite remember the ticker symbol.
Indeed, it’s the big space (and AI) play to own, with a market cap that’s currently hovering just south of the $2 trillion mark. There are big IPOs, and then there’s SpaceX (landing at over $1 trillion). With more AI IPOs to come, the big question is whether you should venture to take a bet on a truly sci-fi-feeling company that might grow to become something even bigger in the coming decades.
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SpaceX is exciting, and it’s easy to place a bet
The space economy is real, but in my view, AI and data centres (both here on Earth and orbiting the planet) need to not only work, but also prove economical (or maybe not!) for the stock to really get that jolt. At the end of the day, we’re not talking about a small up-and-comer here; we’re talking about an aircraft-carrier-sized public business with one of the biggest visionaries running the show. As is the case with most Musk-led companies, you’re going to pay quite the price of admission.
If you want premium management, or in the case of SpaceX, you’re going to have to pay what could be the fattest key person premium out there today. Combined with massive volatility (shares dipped 4.1% on Wednesday), it feels like letting things calm down before punching a ticket could make sense, especially as the float of shares looks to swell further.
Indeed, if you are a SpaceX fan or Musk believer, I won’t stop you from buying. Canadians can just swap their loonies for greenbacks and buy the stock as it is on the Nasdaq exchange. If you’re a holder of various tech exchange-traded funds (ETFs), you might already have a good amount of exposure.
Betting on SpaceX as a Canadian via the TSX? But why?
For Canadian investors who want to up their exposure to SpaceX and its promising sci-fi-esque future without having to go through the pain of making the exchange (the loonie has been under pressure following the latest Fed interest rate hike), there’s a convenient option on the TSX Index: Space Exploration Technologies.
Personally, I’d much rather own the Nasdaq shares, even as a Canadian, than hang onto the TSX version, which is a Canadian Depository Receipt (CDR). With such a name, you can keep your cash in Canadian dollars, but with Norbert’s Gambit and other techniques to take FX fees out of the equation, I’d argue that just owning the Nasdaq version is the move, even if the loonie is only going for US$0.71.
When it comes to owning stocks long-term, though, I think it’s a waste to try to “play” foreign exchange moves. Focus on the business itself and the growth in play, especially with growthier names like SpaceX, which may very well boom or bust in a way such that FX moves end up being less remarkable. Unless you’re in that niche of Canadian investors who value what CDRs bring to the table, I’d say making the exchange and buying the SPCX shares is the best bet.
So, in short, yes, you can buy SPCX in Canada. And there are a handful of ways to do it. Most notably, via the Nasdaq shares, the CDRs, and an ETF that owns it. The former is my favourite way to go when it comes to U.S. companies.
