Key facts
- SpaceX's stock has slipped close to its $135 offer price, ending Tuesday at $136.08.
- The company's shares have traded below their $150 opening price since their June 12 debut.
- A break below the IPO price could be a psychological blow, suggesting the stock is driven by speculation.
- The performance of SpaceX's stock is being closely watched by other companies considering large IPOs.
- Retail investors, who received about 20% of the IPO allocation, could be significantly impacted by a price drop.
- SpaceX's first earnings report is seen as a major test for the stock's valuation.
SpaceX's stock is facing pressure, nearing its initial public offering (IPO) price, which could turn its highly anticipated market debut into a test of investor confidence. After soaring above a $2 trillion valuation shortly after its June 12 listing, the shares have experienced rocky trading, falling below the $150 opening price and approaching the $135 offer price.
Market strategists suggest that a drop below the IPO price would be a significant psychological blow, potentially fueling a narrative that the stock's rise was based on speculation rather than fundamentals. This could disappoint investors hoping for quick gains and align SpaceX's early performance with that of many hyped IPOs that often see negative returns in their first month.
However, some market participants view the current trading as a normal price discovery process. They note that dips below IPO prices are not uncommon for newly listed companies, citing examples like Cerebras Systems and Meta (formerly Facebook). Investors and employees selling shares after lockup periods expire can also contribute to near-term price declines without fundamentally altering the company's long-term prospects.
The performance of SpaceX's stock is being closely monitored by other companies, including OpenAI and Anthropic, which are considering their own public listings. A struggling IPO for SpaceX could lead some companies to postpone or withdraw their offerings, while others with significant capital needs might be incentivized to move quickly to secure funding amidst an "AI arms race."
Retail investors, who received a substantial portion of the IPO allocation, could be particularly affected by a decline below the offer price. Concerns exist that a significant loss could foster skepticism about market fairness. SpaceX's upcoming first earnings report is expected to be a critical juncture for assessing the stock's valuation, especially for companies that are not yet profitable.