SpaceX shares fell below the initial public offering price on Wednesday.
Just over a month after completing the biggest IPO in history, the rockets-to-AI company saw its stock dip 1.5%. It hit $134. That is below the $135 initial public offering price. It is also a long way from last month’s high. For a brief moment, that peak value pushed SpaceX past Microsoft and Amazon. Both giants have longer public track records. Both have stronger, proven financial results.
If this drop holds, investors who bought at the IPO are now sitting on paper losses for the first time in their tenure with the stock.
It serves as a stark reminder that Wall Street enthusiasm is fragile. It cools quickly, even when backed by massive ambition and Elon Musk. Last month, the market valued the company above $2.6 trillion. By Wednesday afternoon, that value had shrunk to roughly $1.75 trillion.
The Debt-Fueled AI Bet and Market Pushback
The about-face reflects deeper anxieties. Investors are worried about debt-funded AI spending. They are also worried about potential Federal Reserve rate hikes. Rising rates tend to punish stretched tech valuations.
SpaceX tapped the bond market last month to raise $525 billion worth of bonds. Wait, $25 billion. To build costly technology infrastructure. Wall Street is hotly debating the return prospects on such spending.
“The stock’s retreat seems to be a combination of profit-taking, valuation reassessment, and the unwinding of extremely bullish following one of the most anticipated IPOs,” said Daniela Hathorn. She is a senior market analyst at Capital.com.
Hathorn noted that profit-taking. And valuation reassessment.
This is not the first time a stock has traded below its IPO price. It happens often during periods of broader market stress. But the drop here bolsters critics. They argue SpaceX’s valuation is stretched. The company lost $4.9 billion last year. Many of its biggest ambitions remain untested.
“There hasn’t been anything lately to remind people some of the catalysts for they bought SpaceX,” said Steve Sosnick, chief analyst at Interactive Brokers.
Will the Lock-Up Expiration Crash the Price?
Investor focus is shifting. They are waiting for the company’s first earnings report as a public entity. Analysts expect it in the first week of August.
That report is only half the story.
After that report, the first phase of the IPO lock-up period expires. Eligible employees and early shareholders will be allowed to sell portions of their holdings. Analysts say this event could weigh further on the stock. Supply increases. Does demand follow?
Meanwhile, eyes are also on Starship. The 13th test flight is critical. Success there lowers launch costs. It enables orbital data centers and lunar missions. Failure stalls the whole thesis.
“The big thing is Elon got his money to take SpaceX to next level of growth,” said Parmar. “It will take many years to see that plays out. Not 30-day trading.”
