Shares in SpaceX ended their first month as a public company at around $145 each on Friday, roughly 18% less than the high on its first day of trading and 35% below its peak so far. The decline marks a dramatic reversal for a stock that had surged after its 12 June IPO, which was the largest in history.
When shares first became available on the public market, the company priced them at $135 each. The price immediately shot up to $150 that first day, climbed to $176, and closed at $160.95. The following week, SpaceX hit an intraday high of $225, surpassing Amazon and Microsoft in total market value.
“SpaceX shares have fallen 35% from their peak one month after the largest IPO in history.”
"With Elon Musk, any company he touches gets people excited," said Keith Snyder, analyst at CFRA. "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."
SpaceX earlier this year acquired Musk's AI start-up xAI, recently renamed SpaceXAI and best known for the controversial chatbot Grok, and also started leasing data centre capacity to other tech companies. But its main business is 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% that day.
As the reality of how SpaceX currently makes money came into clearer focus, the stock began to sink. Even during a tumultuous period for tech stocks, SpaceX took a particular hit. When it was added to the Nasdaq100 index on 7 July, although the index closed down 1.7%, SpaceX fell 4.4%. An earlier addition to the FTSE Russell index had given the shares a slight boost.
"If you bought around the first tick you're definitely underwater," Snyder said. He added that the stock "started to look a lot like a meme stock," pointing to GameStop and more recently Wendy's, where retail investors drive up a price through excited online conversation. SpaceX did not respond to a request for comment.
