SpaceX IPO: One Month After Historic Debut, Shares Slide From Peak
· 4 min read ·
SpaceX investors have experienced a dramatic shift in sentiment during the company's first month as a publicly traded entity, moving from euphoria to growing unease as shares have retreated significantly from their peak.
A Record-Breaking Debut Fueled by AI Hype
When shares in Elon Musk's aerospace and telecommunications firm became available to individual investors on June 12, the response was immediate and intense. Although the company set its initial share price at $135, the stock surged to $150 almost immediately, climbed to $176, and closed its first day of trading at $160.95.
The debut cemented SpaceX as the largest initial public offering in history. The following week, shares continued their upward trajectory, reaching an intraday high of $225 and briefly pushing the company's total market value past those of Amazon and Microsoft.
Keith Snyder, an analyst at investment research firm CFRA, attributed the frenzy to both Musk's reputation and the company's positioning within the artificial intelligence space. "With Elon Musk, any company he touches gets people excited," Snyder said. "But this was also the first time people felt like they were able to invest in something that was being marketed as an AI play."
Willy Lee, an investor at Neosteller, a firm that helps individuals invest in private companies, echoed that assessment. "Everyone saw SpaceX as an AI story," he said.
Earlier this year, SpaceX acquired Musk's AI start-up xAI — recently renamed SpaceXAI and best known for the controversial chatbot Grok — and began leasing data centre capacity to other technology companies.
Reality Sets In as Core Business Takes Focus
Despite the AI narrative, SpaceX's primary operations remain the manufacture and launch of rockets and Starlink telecommunications satellites. When Starlink announced price cuts in the Memphis, Tennessee area amid local concerns about a massive data centre project, SpaceX shares dropped 8% in a single day.
As the realities of how SpaceX currently generates revenue came into sharper focus, the share price began a steady decline. The downturn came during an already volatile period for technology stocks, but SpaceX was hit particularly hard. When the company was added to the Nasdaq100 index on July 7, the broader index closed down 1.7%, while SpaceX fell 4.4%. An earlier inclusion in the FTSE Russell index had provided only a modest bump.
By the end of its first month of trading, SpaceX shares were changing hands at approximately $145 — roughly 18% below the first-day high and 35% below the stock's peak.
Early Investors Face Losses
The decline means that retail investors who purchased SpaceX stock during its first five days of trading are now looking at potential losses. "If you bought around the first tick you're definitely underwater," Snyder said.
He drew comparisons to meme stocks such as GameStop and Wendy's, where retail investors drive up share prices largely through online enthusiasm rather than underlying business fundamentals. Snyder projected that SpaceX could fall further, to around $115 per share, based on the company's actual business performance — a level that would still value the firm at approximately $1.5 trillion.
Samuel Kerr, who leads equity capital markets analysis at Mergermarket, noted that the impact varies depending on when investors bought in. Those who acquired shares at the proposed listing price of $135, or who held pre-IPO equity, remain in a relatively comfortable position. Those who bought during the first few days of trading, however, are "not very happy right now," Kerr said.
Musk Leverages Volatility Amid Uncertain Future
Musk has remained publicly bullish on SpaceX's prospects. After the listing made him the world's first trillionaire, he projected that the company would generate $1 trillion in annual revenue by 2030. That figure is roughly 55 times the $18 billion in revenue SpaceX reported last year, according to financial disclosures filed ahead of the IPO. The company currently operates at a loss.
Musk has also demonstrated a willingness to use SpaceX's volatile shares as currency. On June 16, when the share price was near its peak, SpaceX announced the acquisition of Cursor — a start-up behind an AI-powered code-writing bot — in an all-stock deal valued at $60 billion. Kerr described the timing as showing "a level of market sophistication that almost no other issuer has," noting that the inflated share price essentially allowed Musk to acquire Cursor for free.
Morgan Stanley, which served as a lead banker on the IPO, appears to view the downturn as temporary. The firm initiated analyst coverage last week with a target price of $300 per share — a 33% premium over SpaceX's highest trading price to date.
Attention is now turning to the company's first public earnings report, which analysts expect in early August, though no date has been announced. The report is likely to coincide with the end of a lock-up period during which SpaceX employees have been barred from selling shares they received as compensation. A flood of newly available shares, combined with a more detailed picture of the company's finances, could trigger further dramatic price movements.
"If SpaceX can do all the things it says it will do, yes, investors are sitting on the most valuable company ever," Kerr said. "But it's got a lot of work to do to get there."
With SpaceX's first earnings report on the horizon and a lock-up period set to expire, the coming weeks could prove pivotal for the world's largest IPO. Will the company's financials justify its lofty valuation, or are further declines in store? Share this article and join the conversation about what comes next for SpaceX.
