SpaceX shares fell below their $135 initial public offering price for the first time on Wednesday, marking a sharp reversal for the aerospace firm after its IPO last month. The stock closed at $135.27, amid profit-taking, valuation concerns, and uncertainty over the company’s long-term prospects.
The decline, reported by Reuters, came as investors grappled with the reality of SpaceX’s valuations, which had briefly surpassed $2.6 trillion in June but now face scrutiny. The stock’s retreat followed a 13% drop since its inclusion in the Nasdaq 100, a move that failed to stabilize investor confidence. “I think the elephant in the room is there’s a lot of folks that are in the stock and maybe some of them or a good number of them are wanting to take some liquidity,” said Justus Parmar, CEO of SpaceX investor Fortuna Investments, according to Reuters.
Investor Concerns and Market Realities
Analysts attributed the stock’s decline to a mix of profit-taking, valuation reassessment, and the unwinding of extremely bullish positioning following one of the most anticipated listings in recent years. Reuters reported that SpaceX’s $25 billion bond offering last month, aimed at funding technology infrastructure, added to concerns about its debt-funded AI spending. “The stock’s retreat seems to be a combination of profit-taking, valuation reassessment and the unwinding of extremely bullish positioning following one of the most anticipated listings in recent years,” said Daniela Hathorn, senior market analyst at Capital.com, per Reuters.
The company’s financials also drew scrutiny. Despite its $2.6 trillion valuation peak, SpaceX lost $4.9 billion last year, raising questions about its ability to sustain growth. “There hasn’t been anything lately to remind people of some of the catalysts for why they bought SpaceX,” said Steve Sosnick, chief market analyst at Interactive Brokers, according to Reuters. The stock’s drop below its IPO price, while not a “tragedy,” underscored its high-profile status and the pressure to deliver on Elon Musk’s ambitious vision.
Starship Test and Future Uncertainties
Investors are now turning their attention to SpaceX’s 13th Starship test flight, scheduled for Thursday. The launch, which will see the rocket’s booster and upper stage simulate a landing in the Gulf of Mexico, represents a critical milestone in the company’s efforts to develop reusable launch systems. The test’s outcome could influence investor sentiment, as Starship’s success is vital for reducing costs and enabling projects like orbital data centers and lunar missions.
The stock’s volatility has also been amplified by its limited float—only 4% of shares are trading on the Nasdaq. This “small float,” combined with constant attention on the company, has created wild swings in the first month of trading. “We’re really on maybe 30 days or so into this experiment, still so very early,” Parmar said, per Reuters. “The big thing is Elon got his $85 billion to take SpaceX to the next level of growth, which will take many years to see how that plays out.”
What’s Next for SpaceX?
Looking ahead, investors will watch the company’s first report after listing. Analysts expect the report to happen in the first week of August. After the report, the first phase of the IPO lock-up period is set to expire, allowing eligible employees and some early shareholders to begin selling portions of their holdings, an event that analysts say could weigh further on the stock.
Meanwhile, the broader market’s cooling enthusiasm has also impacted SpaceX. CNBC reported that the stock’s decline follows a broader deflation in tech stocks over the last month. The company’s performance will likely serve as a bellwether for other companies like Anthropic and OpenAI, which have filed confidentially for an IPO.
As the market digests these developments, SpaceX’s journey remains a high-stakes experiment. The coming months will test whether its ambitious vision can translate into sustained shareholder value—or if the reality of its challenges will prove too much for even the most ardent investors.
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