Just a month ago, SpaceX's stock market debut triggered a frenzy that made it the largest initial public offering in history. On 12 June, the company co-founded by Elon Musk priced its shares at $135 each, but the price immediately shot to $150, climbed to $176, and closed at $160.95. The following week, shares hit an intraday high of $225, briefly surpassing Amazon and Microsoft in total market value.
But the excitement has faded. At the end of its first trading month, shares were selling at around $145 — roughly 18% less than the high on the first day and 35% below the peak. Retail investors who bought during the first five days are now nursing losses. “If you bought around the first tick you’re definitely underwater,” said Keith Snyder, an analyst at investment research firm CFRA.
“SpaceX shares have tumbled 35% from their peak a month after the record-breaking IPO, leaving retail investors underwater.”
The initial enthusiasm was fuelled by artificial intelligence. SpaceX earlier this year acquired Musk’s AI start-up xAI, renamed SpaceXAI and best known for the controversial chatbot Grok, and started leasing data centre capacity to other tech companies. “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, agreed: “Everyone saw SpaceX as an AI story.”
But SpaceX’s main business remains the manufacture and launch of rockets and Starlink telecommunications satellites. When Starlink said it was cutting prices in the Memphis, Tennessee area amid local concerns over a massive data centre project, SpaceX shares fell 8% in a single day. As the reality of how the company currently makes money came into clearer focus, shares began to sink.
Even on a tumultuous day for tech stocks, SpaceX fared worse. When it was added to the Nasdaq100 index on 7 July, the index closed down 1.7%, but SpaceX fell 4.4%. (An earlier addition to the FTSE Russell index had given shares a slight boost.) “It started to look a lot like a meme stock,” Snyder said, pointing to GameStop and Wendy’s, where retail investors drive up a stock price through little more than excited online conversation. He expects SpaceX to dip even further. SpaceX did not respond to a request for comment.
A month after its record-breaking debut, the question hanging over SpaceX is whether the stock can recover — or whether the AI story has already been told.