Share trading in Elon Musk’s rocket company has turned sour for early investors. SpaceX’s share price dropped to $132.62 on Wednesday, falling below its initial public offering price of $135 in June – a decline of 41% from its post-float peak.
The company’s stock has been volatile since it began trading on the Nasdaq a little over a month ago. After an initial investor frenzy that valued SpaceX above Amazon and Microsoft, the price has drifted downward. On Wednesday alone, the stock fell more than 2%, compared to a 0.2% decline on the wider Nasdaq index.
“SpaceX shares fell to $132.62, below its $135 IPO price, down 41% from peak.”
If the price holds or falls further, those who bought shares around the flotation stand to lose money. The IPO made Elon Musk the world’s first trillionaire, but the stock has taken a particular hit even amid a tumultuous few weeks for tech stocks.
Investors initially treated SpaceX as the first chance to invest in an AI company, financial analysts told the BBC earlier. The firm earlier this year acquired Musk’s AI start-up xAI, recently renamed SpaceXAI, which operates the controversial chatbot Grok and leases data centre capacity to other companies. But SpaceX’s main business remains rockets and Starlink satellites.
When Starlink said it was cutting prices in Memphis, Tennessee amid local concerns over a massive data centre project, SpaceX shares dropped 8%. “There hasn’t been anything lately to remind people of some of the catalysts for why they bought SpaceX,” said Steve Sosnick, chief market analyst at Interactive Brokers, told Reuters.
SpaceX is expected to release its first public earnings report in August. Sosnick 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 did not respond to a request for comment.