SpaceX’s stock market debut made history last month, but a month later the excitement appears to be cooling fast, leaving early investors nursing losses.
When Elon Musk’s rocket and satellite company listed shares to the public on 12 June, demand was overwhelming. Shares priced at $135 shot up to $150 on their first day, touched $176, and eventually closed at $160.95, making it the largest initial public offering in history. The following week, the stock climbed even higher, briefly hitting $225 and pushing SpaceX’s market value past both Amazon and Microsoft.
Analysts say much of the early frenzy was driven less by rockets and more by artificial intelligence. Keith Snyder of investment research firm CFRA noted that Musk’s involvement alone tends to excite the market, but this listing was also the first chance for everyday investors to buy into what was being sold as an AI opportunity. Willy Lee of private-investment platform Neosteller agreed, saying the public largely viewed SpaceX as an AI story rather than a space company.
That AI narrative was bolstered by SpaceX’s earlier acquisition of Musk’s start-up xAI, now rebranded SpaceXAI and known for its Grok chatbot, along with the company’s move into leasing data centre capacity.
But cracks soon appeared. When Starlink cut prices in Memphis, Tennessee amid community backlash over a massive data centre project, SpaceX shares fell 8% in a single day. The stock has struggled since, even underperforming the broader tech sector during a rocky few weeks for the industry. When SpaceX joined the Nasdaq 100 on 7 July, the index slipped 1.7% while SpaceX shares dropped 4.4%.
By the end of its first month of trading, SpaceX shares were changing hands around $145 — roughly 18% below their first-day peak and 35% off their highest point yet. That leaves many retail investors who bought in during the opening days sitting on paper losses. Snyder likened the trading pattern to meme-stock behaviour seen with GameStop and Wendy’s, where online enthusiasm rather than fundamentals drives prices, and predicts the stock could fall further to around $115, valuing the company near $1.5 trillion.
Samuel Kerr of Mergermarket noted that the price swings have hit investors differently: those who bought at the IPO price or held pre-IPO equity remain comfortable, while those who jumped in during the first days of trading are far less pleased.
Musk, for his part, has stayed bullish, projecting SpaceX will generate $1 trillion in annual revenue by 2030 — more than 50 times last year’s $18 billion. He has also used the volatile stock as a bargaining tool, buying AI coding start-up Cursor for $60 billion in an all-stock deal timed to a share-price spike, a move Kerr described as showing rare market sophistication.
Morgan Stanley, a lead underwriter on the IPO, remains optimistic, setting a $300 price target — a third higher than SpaceX’s best trading day so far. The company’s first public earnings report, expected in early August, will coincide with the end of a lock-up period that frees employees to sell their shares, a moment analysts say could trigger fresh volatility.Source: bbc.co.uk