SpaceX launched last month with a record-setting IPO of $135 per share. At one point during its third day of trading, the company briefly surpassed (1) Amazon and Microsoft in market capitalization to become the fourth-largest publicly traded company.
That is the case no longer, as traders are busy scrubbing a swath of the rocket maker’s stock price.
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Just over a month following a historic public offering, SpaceX doesn’t have the same allure it once did on Wall Street. As of Friday afternoon, Elon Musk’s rocket and AI company was trading at $125 per share, down 43% in value from its record high of $225. SpaceX shares slid below its original listing price for the first time (2) on July 15.
The company has shed just over $1 trillion in market capitalization, having peaked at $2.7 trillion on June 16.
SpaceX is up against short-sellers as well. They’re piling on and betting against the company, CNBC reported (3), taking on about one-third of its scarce, publicly available shares.
Space X’s stock price woes were magnified after it pulled the plug on the 13th test flight for its Starship rocket on July 16, citing an engine ignition failure. Development of the 400-foot tall reusable rocket is a key plank in Musk’s ambition to drastically lower the cost of space travel.
“Next launch attempt hopefully in a few days,” the Tesla CEO wrote on X (4), the social media platform he owns. He added that “early next week” will be the next available launch timing. SpaceX shares fell 6% during Friday morning trading.
SpaceX stock swings
Fewer than 5% of SpaceX’s shares are publicly available to be purchased and sold, a limited amount that nevertheless attracted retail and institutional investors given the enormous hype around the company’s IPO.
SpaceX equity prices, though, could fall even further. The rocket firm implemented staggered lock-up agreements that bars employees and early investors from selling their shares for a certain period of time, according to its filings (5) with the Securities and Exchange Commission. The vast majority of shares, or 95%, are subject to these lockup agreements that strictly limited publicly-available shares, at least at the outset.
The first tranche of shares is expected to hit the market sometime after SpaceX’s second-quarter earnings report in early August, its first as a publicly-traded company. A fresh supply of shares on Wall Street could depress SpaceX’s stock price further if investors lose their enthusiasm to snap them up for their portfolios.
More shares will be periodically released for public buying in the six months after SpaceX’s June 12 IPO date.
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The future of SpaceX stock
It’s not all doom and gloom for SpaceX. The company was fast-tracked onto the Nasdaq-100 and it began trading (6) on the index on July 8.
The rocket-making company’s inclusion onto the Nasdaq is poised to unlock (7) a wave of buying from passively-managed index funds and 401(k) retirement plans. It won’t be a huge source of market momentum: It could generate around $4.3 billion in passive inflows for SpaceX, per Reuters. (8)
Prominent analysts are taking note of the company’s resilience. “SpaceX hangs in there,” CNBC host Jim Cramer said in a social media post (9) Friday morning. “Odd.”
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Article Sources
We rely only on vetted sources and credible third-party reporting. For details, see our ethics and guidelines.
MarketWatch (1); The Wall Street Journal (2); CNBC (3); X (4), (9); U.S. Securities and Exchange Commission (5); CNN (6); Quartz (7); Reuters (8)
This article originally appeared on Moneywise.com under the title: Elon Musk’s SpaceX has lost $1T in market cap since mid-June as Starship launch is scrubbed
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