SpaceX Drops Below IPO Price, Loses $1.2 Trillion From Post-Listing Peak

SpaceX has witnessed a sharp decline in its share price just weeks after its highly anticipated stock market debut, with the stock falling around 20 per cent below its initial public offering (IPO) price. The decline has erased nearly $1.2 trillion in market value from the company's post-listing peak, raising questions among investors about its valuation despite its continued position as one of the world's most valuable publicly traded companies.

SpaceX debuted on the Nasdaq on June 11 with an IPO price of $135 per share, raising approximately $75 billion and valuing the company at $1.77 trillion. Strong investor demand initially pushed the stock to a record high of $225.64, briefly lifting its market capitalisation to nearly $3 trillion. However, the shares have since fallen to an intraday low of $108.66, reducing the company's valuation to around $1.5 trillion.

Analysts attribute the decline to a combination of factors, including concerns over SpaceX's premium valuation and heavy investment plans. The company continues to spend aggressively on artificial intelligence initiatives, expanding its Starlink satellite internet network, and developing next-generation space infrastructure. Investors are also assessing the impact of the company's recent $25 billion bond issuance, which was aimed at financing AI infrastructure and data centre expansion.

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Market sentiment has also been weighed down by the approaching expiry of the IPO lock-up period, which will allow employees and early investors to sell previously restricted shares. The anticipated increase in available shares has raised concerns about additional selling pressure. Investors are also awaiting SpaceX's first quarterly earnings report as a publicly listed company, scheduled for August 4, to gain greater clarity on its financial performance and future growth strategy.

The stock's decline has benefited short sellers, who have reportedly generated an estimated $15.5 billion in paper profits since the post-IPO rally reversed. Reports indicate that around 360 million shares, representing roughly 56 per cent of the company's free float, are currently on loan to investors betting on further declines, reflecting continued bearish sentiment in the market.

Despite the recent sell-off, some analysts remain optimistic about SpaceX's long-term prospects. Morgan Stanley analyst Adam Jonas has maintained a $300 price target, arguing that the company's current valuation largely reflects its launch services and Starlink operations while assigning limited value to its artificial intelligence ambitions. Analysts believe the upcoming earnings report, progress on expansion plans, and market reaction after the lock-up expiry will play a crucial role in determining whether SpaceX can regain investor confidence.

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