SpaceX shares fall 20% below IPO price after record market debut

SpaceX shares have fallen about 20% below their initial public offering price of $135, just over six weeks after the Elon Musk-led company delivered the biggest IPO in US history.

The decline has erased nearly $1.2 trillion from SpaceX's market value after the stock dropped from an intraday high of $225.64 reached shortly after its Nasdaq debut in June. The company's market capitalisation has fallen to around $1.5 trillion from a peak of nearly $3 trillion.

SpaceX priced its IPO at $135 per share on June 11, raising $75 billion through the sale of 555.56 million shares. The listing valued the company at $1.77 trillion, making it one of the most valuable companies to enter the public market. Musk retained about 82% voting control after the offering.

Investor enthusiasm initially pushed shares above $225, briefly giving SpaceX a valuation higher than companies such as Microsoft and Amazon. However, concerns over valuation, spending plans and rising debt have weighed on investor sentiment.

A key concern among investors is whether SpaceX's valuation can be justified while the company continues to invest heavily in artificial intelligence, Starlink expansion and space infrastructure. Last month, SpaceX raised $25 billion through the bond market to fund AI infrastructure and data centre expansion.

The upcoming expiry of the IPO lock-up period, which will allow employees and early investors to sell previously restricted shares, has also raised concerns about additional selling pressure.

SpaceX is scheduled to release its first quarterly earnings report as a public company on August 4, with investors looking for details on its financial performance.

The decline has benefited short sellers, who have made an estimated $15.5 billion in paper profits since the post-IPO rally reversed. Around 360 million shares, or nearly 56% of the company's free float, are currently on loan to short sellers.

Despite the decline, some analysts remain optimistic. Morgan Stanley analyst Adam Jonas said the current share price largely reflects the value of SpaceX's launch business and Starlink satellite internet operations, while assigning limited value to its artificial intelligence plans. He has maintained a $300 price target for the company.