SpaceX's share price has fallen below its stock market debut just over a month after its initial public offering, closing at $132.62 on Wednesday – down 41% from its post-float peak. The drop means investors who bought at the IPO price of $135 in June now stand to lose money on their investment if the price holds or falls further.
The decline marks a sharp reversal from the frenzy that greeted the flotation of Elon Musk's rocket, satellite and artificial intelligence company, which made him the world's first trillionaire. Initially valued at more than Amazon and Microsoft, the stock has drifted downward as the initial excitement faded.
“SpaceX share price dropped below its $135 IPO to $132.62, down 41% from its peak.”
Even amid a tumultuous few weeks for tech stocks, SpaceX has taken a particular hit. While the wider Nasdaq index fell 0.2% on Wednesday, SpaceX's stock dropped more than 2%. The company's shares have been volatile since they began trading on the public stock market a little over a month ago.
The slide has been driven by a mix of factors. Earlier this year, SpaceX acquired Musk's AI start-up xAI, recently renamed SpaceXAI, marking its first foray into an AI-focused business. xAI is best known for the controversial chatbot Grok, and through that acquisition, SpaceX now leases data centre capacity to other tech companies. Initially, investors treated SpaceX as the first chance to invest in an AI company, according to market analysts who spoke to the BBC.
But the company's main business remains the manufacture and launch of rockets and telecommunications satellites called Starlink. When Starlink said it was cutting prices in the Memphis, Tennessee area amid local concerns over a massive data centre project, SpaceX shares fell by 8%.
Steve Sosnick, chief market analyst at Interactive Brokers, told Reuters: “There hasn’t been anything that lately to remind people of some of the catalysts for why they bought SpaceX.” He added: “The fact that a stock has fallen a couple of dollars below its IPO price in itself is not a tragedy, but SpaceX is heavily watched and has an important role in investor psyche.”
SpaceX is expected to release its first public earnings report in August. The company did not immediately respond to a request for comment.