3 lawmakers bought SpaceX stock days after IPO, sparking probe fears

Three U.S. House members purchased SpaceX shares within days of the company's record-breaking June IPO, a pattern that legal experts say could trigger insider trading investigations.

Reps. Dan Meuser (R-Pa.), Josh Gottheimer (D-N.J.) and a third lawmaker bought SpaceX stock between June 12 and June 15, days after the $1.8 trillion IPO, raising questions about political access to hot offerings.

"The proximity of these purchases to the IPO date, combined with the limited public float, creates an appearance problem that the Office of Congressional Ethics will likely examine," said Kedric Payne, senior director of ethics at the Campaign Legal Center.

Meuser disclosed a purchase on June 15, three days after the June 12 listing. Gottheimer's trade came within the same window. SpaceX allocated only about 5% of shares to the public, with retail investors receiving 30% of that — three to six times the typical allocation, according to the New York Times. The stock surged past $200 in its first week before sliding 25% to around $152.

The Stop Trading on Congressional Knowledge (STOCK) Act of 2012 prohibits lawmakers from using non-public information for trades, but enforcement has been sparse. A formal probe could pressure SpaceX's already-sliding stock and amplify governance concerns around a company where Elon Musk controls 85% of voting power.

Why the timing matters

The lawmakers' purchases landed in a window when SpaceX's IPO prospectus was still being absorbed by the market. The S-1 filing, released in May, revealed a company with $4.9 billion in net losses for 2025 and a $6.4 billion operating loss in its AI unit alone. NYU Stern professor Aswath Damodaran called the $28.5 trillion total addressable market cited in the prospectus a "hallucination" and said the IPO was 27% overvalued based on his discounted cash flow analysis.

SpaceX's stock has since fallen 25% from its post-IPO peak, wiping out roughly $450 billion in market value. The decline accelerated after the company issued $25 billion in bonds on June 22-23 that traders immediately priced at junk levels — an unusual move for a company with investment-grade ratings from Moody's and S&P.

Regulatory precedent and market impact

The STOCK Act has historically produced limited enforcement outcomes. A 2022 investigation by the Office of Congressional Ethics into similar trading patterns by lawmakers during the pandemic resulted in no formal sanctions. However, the sheer size and visibility of the SpaceX IPO — the largest in history — could increase pressure on the Ethics Committee to act.

If a probe materializes, it would add to SpaceX's growing list of governance headaches. The company faces a potential insider share unlock in September, when 44% of outstanding shares become eligible for sale. Veteran investor George Noble has warned that the unlock could flood the market with supply, calling the IPO "built to separate retail investors from their money."

For the broader market, the episode underscores the structural advantage lawmakers hold in accessing oversubscribed IPOs. With SpaceX allocating just 5% of shares to the public, the ability to secure an allocation at the offering price — before the first-day pop — represents a significant financial edge. The three lawmakers' trades are now being scrutinized as a test case for whether the STOCK Act's prohibitions extend to IPO allocations obtained through political connections.

This article is for informational purposes only and does not constitute investment advice.