Shares of Space Exploration Technologies, commonly known as SpaceX, have fallen 13.2% below their initial public offering price, trading at approximately $116 per share according to The Fool. The decline follows a period of extreme volatility after the company’s June 12 debut, which marked the biggest IPO ever, raising more than $85 billion. While the stock initially surged to more than $200 per share within a week of listing, it has since fallen more than 40% from its high.
Surge in Bearish Bets and Market Sentiment
Investors betting against the company have significantly increased their positions. According to estimates from S3 Partners, about 206 million SpaceX shares are now sold short, representing approximately 32% of the company’s publicly tradable float and roughly $25 billion in notional bearish bets, as reported by CNBC. This is a sharp increase from about a month ago, when short interest was estimated at 40 million shares, or roughly 5% to 7% of the float.
Elon Musk responded to the trend on X, stating that the survival probability of firms who maintain a significant short position in SpaceX over time is very low
and claiming that SpaceX will be worth more than Earth if the company achieves its goals.
Operational Drivers and AI Valuation
SpaceX’s current valuation is tied to three primary business segments: rocket launches, Starlink, and artificial intelligence. In 2025, SpaceX’s flagship rocket business carried more than 80% of the 3,194 metric tons of material sent into orbit globally. Starlink, described as the only profitable part of the business, provides broadband and mobile services to 10.3 million subscribers across 164 countries. Last year, Starlink generated $11.4 billion in revenue out of a total company revenue of $18 billion.
The company’s AI ambitions involve selling compute capacity—such as the $920 million per month rental agreement with Alphabet—and a plan to launch data centers into space to lower costs using solar energy. However, Morgan Stanley analysts noted that if the share price falls to $100, it would imply a zero valuation for this AI business.
Key Risks and Upcoming Catalysts
Several factors are contributing to downward pressure on the stock:
- Starship Development: The plan for space-based data centers depends on the Starship megarocket. SpaceX has failed to launch its 13th Starship test flight twice and intends to try again this Thursday.
- Insider Lock-ups: Various lock-ups of insider shares are set to expire over the next year, and up to 1 billion additional shares could be awarded through settlements and options.
- Earnings Report: SpaceX confirmed it will release its first quarterly earnings report as a public company after U.S. markets close on Aug. 4.
Historical Context and Valuation
The stock’s trajectory has seen dramatic shifts in market capitalization. At its peak, SpaceX’s market value briefly pushed above $2.6 trillion, making Elon Musk the world’s first trillionaire with a net worth of $1.45 trillion on June 16. Following the pullback, the company’s valuation fell to around $1.78 trillion, and Musk’s fortune is now estimated at approximately $850 billion by the Bloomberg Billionaires Index.
Analysts suggest that post-IPO weakness is not uncommon. Research from University of Florida finance professor Jay Ritter indicates that more than 70% of companies that went public between 1974 and 2021 delivered negative returns over the following three years compared with their offer price.
Worth a look
