SpaceX, the aerospace and artificial intelligence company founded by Elon Musk, has seen its stock price fall below its initial public offering (IPO) price just over a month after its historic debut. The company’s shares dropped more than 1.6 percent during intraday trading to around $133.74, dipping below the $135 IPO price set in June—the largest IPO ever, which raised $85.7 billion.
Following its IPO on June 12, SpaceX’s shares initially surged, briefly pushing the company’s market capitalization close to $3 trillion and positioning Musk as the world’s first trillionaire. The stock reached a peak trading price of $225.64 before it began to decline in recent weeks, currently valuing the company at approximately $1.765 trillion. Musk’s net worth has similarly decreased to about $850 billion amid the stock's retreat.
The decline in SpaceX’s share price has prompted cautious reactions among investors and analysts, as it underscores the volatility of tech stock valuations in a market grappling with uncertainty. Broader market fluctuations also weighed on SpaceX’s performance, with major technology stocks, collectively known as the "Magnificent Seven"—including Alphabet, Amazon, Apple, Meta, Microsoft, Nvidia, and Tesla—dropping about 9 percent in June.
Industry observers note that while a dip below IPO price is not uncommon for newly public companies, it can be a psychological setback. Some market strategists suggest the decline reflects investor reassessment of speculative valuations rather than strong fundamentals. The post-IPO period often involves limited shares available for trading; currently, fewer than 5 percent of SpaceX’s total shares are publicly accessible. Additional shares are expected to enter the market in the coming months as lockup agreements expire, potentially increasing supply and putting further pressure on the stock price.
SpaceX’s inclusion in the Nasdaq-100 index last week was anticipated to provide support through index fund purchases, but the stock remained steady around $150 without significant uplift. Analysts emphasize that the company is still undergoing a price discovery process and that short-term fluctuations are part of typical market dynamics for high-profile IPOs.
The performance of SpaceX’s stock is being closely watched by other private tech companies planning public offerings, most notably artificial intelligence firms Anthropic and OpenAI. While some experts believe SpaceX’s successful capital raise could motivate these companies to proceed swiftly with their IPOs, others worry that a sustained decline might lead to more cautious pricing or delayed listings.
Retail investors, who reportedly received about 20 percent of SpaceX’s IPO allocation, may face particularly pronounced risks, with some commentators warning against speculative buying driven by enthusiasm rather than fundamentals. The company’s upcoming earnings report is anticipated as a key test for its market valuation. Underwriters typically provide price support in the first 30 days after an IPO, but volatility is expected to persist, especially for loss-making companies without clear profitability pathways.
In the wake of the IPO, SpaceX leveraged its elevated stock price to complete a $60 billion all-stock acquisition of Cursor, a start-up specializing in artificial intelligence tools for computer programming. There is also speculation that Musk may consider using SpaceX’s stock to pursue acquisitions in other sectors, including possibly his electric carmaker, Tesla.