Just created the largest IPO record in history, but SpaceX’s capital market enthusiasm has quickly cooled down.
On July 15th, local time, SpaceX's stock price dropped below $135 during trading hours, reaching a low of $132.28. This was the first time the company’s stock price fell below its IPO price since it went public. Although there was a subsequent rebound, by the close of the day, SpaceX’s stock price was still only $135.27, a decrease of 0.6% compared to the previous trading day.
According to a report by Reuters on July 15, this trend indicates that the frenzy among Wall Street investors towards this ‘rocket + artificial intelligence’ company is waning. Previously, due to Musk's personal influence and the market's optimistic expectations regarding the space economy and AI infrastructure, SpaceX's market value surpassed $2.6 trillion after its listing, briefly surpassing tech giants like Microsoft and Amazon.
Currently, the company’s market value has dropped to approximately 1.78 trillion US dollars.
Since its launch, SpaceX’s market valuation has shown a trend, according to Reuters.
SpaceX completed its listing in June this year at a price of $135 per share, setting one of the largest IPOs in history and helping Musk become the world's first "trillion-dollar billionaire". In the early stages of the listing, investors were enthusiastic about the stock, and the price of the stock rose significantly.
However, reports suggest that as the market gradually cools down from the IPO frenzy, investors are beginning to re-evaluate SpaceX’s valuation, profitability, and future growth plans.
The problem lies in that, many people holding this stock may wish to cash out a portion or even a significant part of their holdings, putting pressure on the stock price. Said Fortuna Investments' CEO Justus Parmar.
Analysts believe that the recent decline in stock prices is partly due to profit-taking, and also related to investors re-evaluating the company's valuation.
Capital.com Senior Market Analyst Daniela Hathorn said that the decline in SpaceX's share price is due to "profit closure, reassessing valuations and a retreat from extremely optimistic positions."
Before and after its launch, SpaceX's high valuation has been controversial. Although the company has a vast business portfolio, including the Starlink satellite network, Starship rockets, and future space infrastructure plans, its financial performance remains challenging. SpaceX lost approximately $4.9 billion last year, and the company also plans to invest significant funds in developing artificial intelligence infrastructure in the future.
In the vicinity of Starbase in Texas, USA, there stands a giant statue of Musk. IC Photo
In June of this year, SpaceX raised $25 billion through issuing bonds, becoming another company that uses debt financing to build high-cost technological infrastructure. There are concerns that, given the likely continued high interest rates or even further increases, the funding costs and return expectations of highly valued technology companies may be affected.
It is noteworthy that including SpaceX in the Nasdaq 100 index, which has a high proportion of technology stocks, did not reverse the declining trend of its stock price. Since being included in this index, SpaceX's stock price has fallen by approximately 13%.
Interactive Brokers's Chief Market Analyst, Steve Sosnick, stated that SpaceX has lacked recent news that could strengthen investor confidence, and the market does not currently see any key factors that could drive up stock prices.
Stock price fell below the issue price, how much in US dollars is not a disaster itself, but SpaceX received high attention, it has important effect on investor psychology.” he said.
Next, the focus of market attention will shift to SpaceX’s first financial report after its listing.
Analysts expect that the company will release its first performance report after listing in the first week of August. After the financial report is released, the first phase of the lock-up period for IPOs will expire. Eligible employees and some early investors will then be able to sell their shares, which could further increase market selling pressure.
In addition, SpaceX's 13th test flight of the Starship has also attracted much attention. Whether the Starship project will be successful will directly affect the company's long-term plans to reduce launch costs, advance the orbital data center, and conduct lunar missions.
