Newsletter · · Ashutosh Agarwal

A Hedge Fund Blowup Gutted Space Stocks Right Before SpaceX Earnings - The Satellite & Space-Comms Race - Week of July 31, 2026

A synthesis of what space and market podcasts said for the week ending July 31, 2026, including a forced hedge-fund liquidation dragging down AST SpaceMobile and Rocket Lab, SpaceX's first earnings and lockup landing in early August, a clean Starship Flight 13, and New Glenn exploding on the pad.

The Satellite & Space-Comms Race

Week ending Friday, July 31, 2026: A Hedge-Fund Blowup Gutted Space Stocks Into Earnings Week

Here's the strange thing about the worst week space stocks have had in a while: almost none of it was about space.

A big, fast-money hedge fund appears to have been forced to sell nearly everything it owned, and because that fund was crowded into the same high-flying, high-risk names that space investors love, the selling spilled straight into AST SpaceMobile, Rocket Lab, SpaceX and their smaller cousins. Good news got ignored. Bad news got punished twice. And all of it happened in the final days before the single most important event this corner of the market has ever faced: SpaceX's first-ever earnings report as a public company, on Tuesday, August 4, followed within days by the first wave of insiders being allowed to sell.

Meanwhile, two genuinely important things actually happened in orbit and on the launch pad, one great, one ugly. SpaceX's giant Starship rocket flew a clean test and dropped real satellites into space for the first time. And a week earlier, Blue Origin's New Glenn rocket blew up on the ground in what one podcast described as a "non-nuclear mushroom cloud."

TL;DR

  • A forced liquidation, not a fundamentals story. A large hedge fund (widely believed to be Leopold Aschenbrenner's Situational Awareness) looks to have dumped its book this week; the buyer of that book, Citadel, suddenly became the top trader in AST SpaceMobile, Rocket Lab, SpaceX and other space names overnight. Space stocks fell together, regardless of company news, AST SpaceMobile briefly touched roughly $50-51 intraday on Wednesday.
  • SpaceX's make-or-break fortnight starts Tuesday. First public earnings land August 4; the first big block of insider shares unlocks within days (podcasts peg it around August 6, and disagree on the exact size, somewhere between 11% and 20%, or 900 million-plus shares). Roughly 56% of all shares are set to free up by year-end. The stock sits near $107-114, down more than 50% from its post-IPO peak.
  • The tech worked even as the stock didn't. Starship's Flight 13 flew successfully over the weekend and, for the first time, deployed 20 real next-generation Starlink satellites with phone-direct capability. AST SpaceMobile says its production line has gone from "production hell" to shipping satellites regularly. The problem this week was never the engineering.

What's new

1. A hedge-fund fire sale dragged the whole space complex down

The most actionable thing that happened this week for anyone holding these stocks has nothing to do with rockets. According to the host of the AST SpaceMobile Podcast (July 31, "Why Is Citadel Suddenly Trading AST SpaceMobile?"), a large hedge fund, he strongly implies Leopold Aschenbrenner's Situational Awareness, was forced to liquidate its holdings this week. The host, a former buy-side investor who now shares his research openly and is himself a large AST shareholder, is a passionate advocate for the stock (investor), so weigh his read accordingly. But his mechanics are worth understanding.

He says he pulled up trading data on the fund's known positions and found that Citadel, acting as market maker, went from zero activity to the number-one advertised trader overnight in name after name: T1 Energy, Nebius, SanDisk, and then the space complex: AST SpaceMobile, Rocket Lab, SpaceX, Redwire and Intuitive Machines, plus Robinhood and Coinbase. His conclusion: Citadel bought the fund's entire book, probably at a 15-30% discount, then started hedging and unwinding it. When a multi-billion-dollar book of high-momentum stocks gets sold at once, he explains, "the correlation for a certain factor essentially goes to one," everything falls together, whether or not it belongs to the fund being liquidated:

"AST, for example, I think hit like 50 and change or 51... a lot of stuff that situational owns is momentum and there's going to be crossholdings... if you're meeting margin requests, then you're going to look to gross down your book."

Why it moves numbers: this is the cleanest possible "the selling is technical, not fundamental" signal. He estimates roughly $45 billion of deployed capital came out of the market in this episode, and that's before you count the copycats and retail investors on margin who got flushed alongside it. His point, echoed in his companion July 31 episode "Why This Selloff Isn't About Fundamentals": when leverage is being forced out, company news simply doesn't register. He even used Rocket Lab as his example, the company "announced some pretty positive news and no one cares because there's no ability to care" while holders are being forced to sell. His framing for what comes next: "If you liked it at 130, you're going to love it at 58", provided the fundamentals actually held up, which he argues they did.

2. SpaceX walks into its first earnings with a loaded gun pointed at the float

Every market podcast this week was circling the same two dates. SpaceX, public only since June 12, reports earnings for the first time ever on Tuesday, August 4, and then the first tranche of previously locked-up insider shares becomes sellable a couple of days later.

Frank Curzio, a veteran newsletter publisher (pundit/investor), laid out the setup plainly on Wall Street Unplugged (July 30). With the stock around $113, he expects a possible pop on earnings, "Elon Musk is fantastic when he has conference calls" and the roughly 25 top firms covering the stock have likely set conservative bars for an easy beat, but he'd wait to enter:

"The average [insider cost] is 40. If you're a 40 and you're one-13, you're going to sell... I would wait to mid-August. Maybe you get lucky and get this thing under a hundred."

The options market agrees it's going to be violent. On Halftime Report (July 28), the desk noted SpaceX's implied volatility sits at 122, which translates to an expected 15% swing after earnings, "a couple hundred billion dollar implied move in market cap," as one host put it. Normally you'd bet on volatility falling after a report, but here the lockup two days later means options stay expensive.

The scale of that lockup is the whole ballgame, and the podcasts don't fully agree on the calendar:

  • Bloomberg Tech (July 28): first earnings early August; "north of 900 million shares potentially unlocked" two days after; shares available for trading go "from a few hundred million to north of five billion by the end of December." About 30% of shares are sold short.
  • Halftime Report: the first insider window is 20% of eligible locked-up stock, two days after earnings.
  • Off The Wall (July 28) gives a more spread-out schedule: 95% of the stock is still locked, unlocking 20% on August 11, 14% on September 24, 14% on October 25, and the final 28% on November 7, and advises waiting until after that final November unlock for a real entry point.

Whatever the precise dates, the direction is the same: a trickle of float becomes a flood, and, as the Off The Wall hosts put it, "if you've seen this much price volatility on 5%... imagine what happens when all of these people who can't get out of it now can get out of it." Why it moves numbers: earnings is a two-day story; the lockup is a six-month overhang. Trade the first, respect the second.

3. Starship Flight 13 flew, and dropped real satellites for the first time

The good news the market shrugged at: after a nerve-jangling last-second abort the week before, SpaceX's Starship, the 407-foot rocket meant to carry the next generation of Starlink, flew a clean Flight 13 over the weekend. Josh Kale of Bankless (investor/pundit) walked through it on Limitless (July 29, "SpaceX Stock Crashed. Starship Flight 13 Didn't."). The milestone that matters:

"For the first time ever, Starship launched active Starlink version 3 satellites into space. These weren't dummy units... it released 20 V3 Starlink satellites, which is more broadband connectivity than Starlink has had in its previous generation."

Both the rocket's booster and the ship itself landed softly, the ship set down so gently on the ocean it didn't explode and reportedly floated for two to three days. The next flight is expected to attempt catching the ship on the launch tower's "chopstick" arms. Kale also relayed the manufacturing story that underpins the bull case: SpaceX now builds a Starship in about two weeks, is assembling seven at once (ships 41 through 48), and COO Gwynne Shotwell is targeting roughly one launch per month in 2026, ramping dramatically in 2027.

Why it moves numbers: as George Ferguson of Bloomberg Intelligence (analyst/pundit) stressed on Bloomberg Tech, the market values SpaceX on its AI-and-data-centers-in-space ambitions, and all of that "is predicated on Starship working to deploy the payload to orbit." His sober caveat, though: a successful test is "just a facilitator", "Starlink just won't generate the revenue and profitability in the long run" to justify the valuation on its own. The technology cleared its hurdle; the business model still has to.

4. Blue Origin's New Glenn blew up on the pad, and it matters for AST

Easy to miss under the SpaceX noise, but consequential: Blue Origin's New Glenn rocket exploded on the ground at Launch Complex 36 the week prior, per the Today In Space podcast (July 30). The hosts (space photographers and enthusiasts, pundit) described "a non-nuclear mushroom cloud" that "completely demolished" the support tower, though the propellant farm and water tower survived. Crucially, the payload, Amazon's Kuiper satellites, was not yet loaded ("Thank God that thing was empty"). Blue Origin says it aims to fly again before year-end; the hosts are skeptical that's realistic and worry it could push the broader Artemis moon timeline back a year or more.

Why it moves numbers, and why it belongs in this newsletter: AST SpaceMobile had been counting on New Glenn as one of its heavy-lift launch options (its largest satellites launch in groups of eight or more, which fits New Glenn). On the July 31 AST podcast, the host explicitly called out "losing blue origin as a launch party" as a negative, and connected it to why AST just raised money via a convertible bond, likely to buy more Falcon 9 launches as a bridge. One rocket exploding in Florida quietly reshuffled a pre-revenue company's deployment plan.

5. AST SpaceMobile says it's through "production hell"

Amid the carnage in its stock, AST SpaceMobile's operational story kept improving. On the July 27 episode ("Production Hell Is Over, Here's Proof"), the host (an owner and investor, promotional in tone) relayed that BlueBird satellites 8, 9 and 10 are now fully deployed, "each are the world's largest communication arrays operating in LEO", built with a new lightweight composite design, hitting a peak data rate of 200 megabits per second. The tell he's most excited about: satellites in production went from 38 to 42 in just two weeks, with BlueBirds 14, 15 and 16 "right behind."

He offered a vivid scale comparison (his own math, worth taking with salt): a single AST launch of three satellites puts up "twice the square footage of the entire constellation of Iridium, which cost Iridium $3 billion." And he reiterated his personal, gun-to-head view, not a price target, that AST has "a pathway... to be worth half a trillion dollars." Other genuine developments: AST won approval for a 23-acre factory expansion in Midland, Texas (1,000-plus jobs, tax incentives) to push output beyond six satellites a month; management publicly described the satellites as a "radar phased array" and floated "space edge AI computing"; and, confirmed July 1, the US Space Development Agency and Missile Defense Agency are using AST satellites as a GPS backup (position, navigation and timing) for military gear in jammed or spoofed environments. Why it moves numbers: every one of these is a step toward AST being valued as an operating company with defense and enterprise revenue, not just a story stock.

The debate: how big is direct-to-device, really?

This is the argument the whole sub-sector hinges on. "Direct-to-device" (D2D) means your ordinary, unmodified phone connecting straight to a satellite, no special hardware. Bulls and bears are miles apart on how large that market is. Here's the honest steel-man of each.

The bull case (mostly from the AST podcasts). The market is far bigger than the "dead zones" everyone quotes. The real prize is the weak-signal problem, going from one bar to four bars, which the AST host and his collaborator "Anpan" estimate could be 10-25% of coverage, versus roughly 1-2% that is true no-service dead zone. On top of that, AT&T's own CEO confirmed carriers could decommission uneconomic rural towers once satellites fill in, which turns D2D from a revenue line into a cost-savings story for the carriers too. Layer on government and defense demand (the GPS-backup work, Golden Dome), plus the far-out "AI compute in space" optionality, and the bull argument is that the addressable market is inflecting upward over time, which is exactly the setup that justifies a rising valuation multiple.

The bear case (mostly from the carriers themselves). The people actually paying for this keep calling it complementary. On the AST podcast's July 24 recap of carrier earnings, T-Mobile characterized satellite as "a fraction of 1% of network traffic," and all three carriers frame satellite as covering only "the 2% they don't reach." The AST host concedes there's marketing spin in that, carriers will never publicly admit to big coverage gaps, but the bear reads it straight: usage is intermittent, data volumes are tiny, and the service is a premium add-on, not a core network. Add that AST is still pre-revenue, capital-hungry (it just did a $1 billion convertible), has now lost a launch provider in New Glenn, and doesn't yet have its constellation fully up, and that its 800-pound-gorilla competitor, SpaceX's Direct-to-Cell, owns both the satellites and the rockets. If D2D is really just a thin premium layer on top of terrestrial networks, today's valuations are hard to defend.

Where it nets out: the swing factor is whether "one bar to four bars" is real, monetizable demand or a story. Watch the language in the upcoming three-carrier joint-venture agreement, that's where theory turns into contracts.

Stocks in play

AST SpaceMobile (ASTS), the fundamental story kept improving while the stock got liquidated.

  • Bull: BlueBirds 8-10 fully deployed; production ramping (38 to 42 in two weeks); Midland factory expansion; all three US carriers converging via an AT&T-led JV; defense and PNT revenue emerging; Grain Management (holder of former T-Mobile 800 MHz spectrum) seeking to test with AST, and, per the FCC's one-year build-out requirement, AST is essentially the only D2D operator that fits that low-band spectrum.
  • Bear: Pre-revenue and burning capital; just diluted holders with a $1B convert; lost New Glenn as a launcher; constellation not yet live; carriers still call satellite "complementary"; SpaceX Direct-to-Cell looms.
  • Next catalyst: A launch next week (the host is traveling to watch it early morning August 5), then earnings on August 10, plus possible formal detail on the Rakuten J-LEO joint venture and rumored military awards.

SpaceX / Starlink (SPCX), the whole complex's sentiment anchor, and a coiled spring.

  • Bull: Only company with cheap, reusable heavy-lift; Starship Flight 13 succeeded and deployed real V3 satellites; Starlink adding half a million to a million subscribers a month (per Pitch The PM); Ron Baron and other long-term holders expect a generational compounder.
  • Bear: ~$18.7B revenue with a ~$4B+ loss, trading around 80x sales; a wall of unlocking shares through year-end; valuation rests on unproven "AI data centers in space." Bank price targets span an absurd range, Morningstar at $63, Morgan Stanley's bull case at $600 (per Limitless), which tells you nobody really knows how to price it.
  • Next catalyst: Earnings August 4; first lockup ~August 6; watch whether it breaks $100.

Rocket Lab (RKLB), quiet on its own merits, caught in the downdraft.

  • Bull: Positive company news this week; now a NASDAQ-100 name and, per She's On The Money, the go-to space play "if you love the idea of space but don't love Elon Musk"; its pending acquisition of Iridium would fold in a real, cash-generative satellite business.
  • Bear: Got sold indiscriminately in the liquidation, with Neutron rocket progress and the Iridium deal both undiscussed.
  • Next catalyst: Neutron milestones and Iridium deal progress.

Iridium (IRDM). The story remains its pending takeout by Rocket Lab, plus its role as the AST "before" picture in scale comparisons.

EchoStar / Hughes (SATS). The object of "backdoor MVNO" speculation Verizon shut down (see below).

Read-throughs

The carriers gave the clearest signals of the week, via AST's earnings recap. On the July 24 AST podcast, the host summarized what all three US carriers said on their own earnings calls (these are operator/insider comments, relayed second-hand):

  • AT&T CEO John Stankey singled out AST SpaceMobile and, for the first time the host had heard a carrier say it explicitly, described the capex-savings angle: satellite coverage lets AT&T decommission uneconomic terrestrial towers, boosting free cash flow. AT&T is "quarterbacking" the three-carrier JV and reiterated it will not grant a network-sharing (MVNO) deal to Starlink.
  • Verizon CEO Dan Schulman proactively slammed the door on the "backdoor MVNO" theory, the idea that SpaceX could buy an MVNO like Charter, or EchoStar's Boost Mobile, to sneak network access. "There's no backdoor ability to gain an MVNO relationship with Verizon." He also said Verizon isn't worried about Starlink competing with its home broadband.
  • T-Mobile downplayed satellite as "a fraction of 1% of network traffic" and will keep offering T-Satellite powered by Starlink for now, but the host argues nothing prevents T-Mobile from also working with AST through the JV. His tell to watch: whether T-Mobile contributes low-band (600-900 MHz) spectrum to the JV, if it does, "that means very clearly they are working with AST."

Why it matters: the definitive three-carrier JV agreement is described as coming "soon" and will need regulatory review. That document is the single biggest read-through catalyst for the entire D2D thesis.

SpaceX as private-market and valuation anchor. Two data points reframed how big, and how intertwined, SpaceX has become:

  • On The Compound and Friends (July 24), Ron Baron (Baron Capital, investor) revealed SpaceX is now roughly $25 billion of his ~$70 billion in assets, built from about $2 billion invested across 27 transactions since 2017, plus $1 billion more bought on the IPO to avoid dilution. His forecast: 20-30x from the IPO price over 10-15 years, and an eventual value of "$20 to 30 trillion dollars, at least $40 trillion." Take the number with a boulder of salt, but it captures why long-term holders aren't flinching at a 50% drawdown.
  • On the Elon Musk Podcast (July 27, pundit/news format), the read-through ran the other way: Alphabet reported over $112 billion in net income, of which nearly $100 billion was unrealized paper gains on its stakes in SpaceX and Anthropic. Its SpaceX stake, about $1 billion invested a decade ago, now ~5% of the company, is marked at over $94 billion. And Alphabet is buying AI compute from SpaceX at nearly $1 billion a month. The catch: those SpaceX shares are locked up, so if Alphabet ever sells into the unlock, "the float expands massively, potentially crashing the price and completely erasing Alphabet's paper profits." A reminder that the lockup overhang reaches far beyond SpaceX's own shareholders.

The size of the thing (for context). Different podcasts cited the IPO as raising roughly $75 billion on 555 million shares (She's On The Money) to "over $86 billion including the greenshoe" (Elon Musk Podcast), at $135/share for an implied valuation near $1.7 to $1.8 trillion, the largest listing in history, with only 4-5% floated and Musk holding 80%+ voting control. The low float squeezed it briefly past $190 and a $2.5 trillion valuation before the roughly 50% collapse. On Big Technology (July 24), the hosts (pundit) were blunt that the IPO was "flawless execution" only in the cynical sense of "manipulating the system to enrich yourself and a few others," and both expect the stock to fall further as employee shares unlock. They also flagged growing Tesla-SpaceX merger chatter, which Musk has begun "seeding", Tesla's market cap sat near $970 billion to SpaceX's ~$1.5 trillion.

Launch and defense. Beyond the New Glenn explosion, the defense demand story showed up inside the AST thread: the SDA and Missile Defense Agency PNT work, plus the host's note that the Pentagon is seeking a "liquidity injection" following a July 21 hearing, with a relevant funding bill possibly passing in August. Component and launch suppliers named this week: Amazon Kuiper (the intended, and spared, New Glenn payload), and AST's launch options spanning Falcon 9, New Glenn, ULA's Vulcan, MHI, Ariane and ISRO.

What changed vs. last week

Last week the whole newsletter was built around SpaceX's post-IPO plunge and the coming "August reckoning." This week those open items started resolving, and a new one dominated.

  • Starship Flight 13, resolved. Last week it had aborted at T-0 with a "retry no earlier than next week." This week it flew successfully over the weekend and deployed 20 real Starlink V3 satellites. The rocket did its job; the stock didn't care.
  • The SpaceX August catalysts, confirmed and imminent. Earnings August 4, first lockup ~August 6. Short interest that we flagged rising toward ~32% last week now sits around 30% (Bloomberg Tech). The debate has sharpened from "will the stock break $100" to "trade the earnings pop, respect the lockup flood."
  • New: the forced liquidation. The dominant story this week, a hedge-fund fire sale dragging every space name down together, did not exist in last week's issue. It's the reason good news (AST production, RKLB) got ignored.
  • New: Blue Origin New Glenn exploded, removing an AST launch option and reshaping its deployment and funding plan, a direct update to last week's note that AST had "hinted at investment in a launch company" and done a surprise $1B convert. The convert now reads clearly as a bridge to buy more Falcon 9 launches.
  • AST fundamentals, updated and improving. Last week's promotional claims about carriers and hardware were partly borne out this week by the carriers' own earnings-call language (Stankey's capex-savings comment especially) and by the BlueBird 8-10 full deployment.