SpaceX Loses Over 600 Billion Dollars in Three Days After Market Debut
The sharp fall comes soon after SpaceX’s record IPO, though its shares remain above the 135 dollar issue price.
SpaceX has lost more than 600 billion dollars in market value in just three trading sessions, marking one of the steepest reversals seen after a major stock market debut.
The company, led by Elon Musk, had recently made headlines with a record breaking IPO that raised 75 billion dollars. Investor excitement initially pushed the stock sharply higher, as many rushed to buy into Musk’s space, satellite internet and artificial intelligence businesses.
However, the momentum quickly changed. SpaceX shares fell 16 percent on Monday, June 22, closing at 154.60 dollars. The decline took the stock to its lowest level since its Nasdaq debut and extended its three day fall to 23 percent.
Even after the selloff, SpaceX remains one of the world’s most valuable companies, with a market capitalisation of just over 2 trillion dollars. The shares are also still trading above the IPO price of 135 dollars.
The size of the loss is striking. According to the Bloomberg Billionaires Index, Mukesh Ambani’s wealth is estimated at 88.3 billion dollars, while Gautam Adani’s fortune stands at around 120 billion dollars. SpaceX’s three day market value decline is nearly three times their combined net worth.
Analysts say the stock’s early surge may have gone too far too quickly. After strong demand during the IPO and heavy buying from retail investors, some traders appear to be taking profits.
Market sentiment has also been affected by SpaceX’s growing focus on artificial intelligence. Bloomberg reported that the company is preparing to raise at least 20 billion dollars through its first investment grade bond offering to support its AI plans. SpaceX has also reportedly entered a major agreement to provide computing power to Reflection AI, an artificial intelligence startup.
Some investors see the AI expansion as a long term opportunity. Others are concerned that SpaceX is moving too fast at a time when its valuation already carries high expectations.
Retail investors played a major role in the early buying rush. According to Vanda Research data cited by Bloomberg, retail investors purchased a net 405 million dollars worth of SpaceX shares during the first five trading sessions after listing. That was more than the combined retail inflows into the so called Magnificent Seven technology stocks during the same period.
Analyst coverage has also begun after the listing. KeyBanc Capital Markets started coverage with a hold equivalent rating, saying SpaceX has strong long term growth potential but much of that promise may already be reflected in the stock price.
Despite the recent pressure, SpaceX shares remain above their IPO price, showing that investors have not fully turned away from the company. But the sharp three day decline is a reminder that even high profile listings can face quick and heavy corrections when expectations run too high.