Shares of SpaceX declined sharply on Monday, marking a third consecutive day of losses, after the company disclosed plans for a substantial bond offering. The rocket company, led by Elon Musk, recently completed a highly publicized initial public offering (IPO) earlier this month. According to a regulatory filing released Monday, SpaceX intends to raise approximately $20 billion through the sale of investment-grade senior unsecured notes. The proceeds are expected to support expensive artificial intelligence (AI) projects and long-term initiatives such as establishing data centers in space.

Despite the steep decline, SpaceX shares closed at $154.60, still about 15% above their IPO price of $135. The downturn followed an 8% drop over the prior two trading sessions. The company’s market capitalization stands at roughly $2.03 trillion, with reported cash holdings of about $100.8 billion.

Separately, shares of Alphabet, the parent company of Google, fell 5% on Monday amid investor concerns triggered by the departure of two key AI researchers. Last week, John Jumper, a senior research scientist and Nobel Prize laureate at DeepMind, left to join Anthropic, an AI startup. In addition, Noam Shazeer, co-lead on Google’s Gemini AI model development, transitioned to OpenAI. These exits have sparked speculation that Alphabet may be losing ground to competitors in the intensifying AI race.

The recent market moves come amid heightened enthusiasm for AI and technology IPOs. Several high-profile companies, including OpenAI, Anthropic, Databricks, and Anduril, are expected to go public later this year, fueling expectations for further surges in tech shares. However, some market analysts and experienced investors urge caution, highlighting the risks associated with IPO investing, especially in hot sectors such as AI.

Historical data show that most newly public companies underperform broader market indexes over time. Since 1990, more than half of IPOs have lagged the S&P 500 within their first month, with that underperformance worsening over longer periods. For example, 70% of firms listed up to two years ago have trailed benchmark returns, often by significant margins. Such statistics have led some experts to characterize IPOs as frequently overpriced and driven by “increasingly puffed-up optimism.”

Critics note that while some IPOs, like SpaceX’s recent debut, may jump initially due to strong demand, the long-term performance often fails to meet heightened expectations. They caution investors about the challenges posed by lock-up periods, which restrict immediate resale of shares, and the potential for concentrated holdings to increase risk.

Others point out that the current environment’s technological and AI themes have amplified market enthusiasm, drawing founders and private investors eager to maximize returns at IPO pricing. This dynamic creates tension between sellers wanting high valuations and buyers hoping to enter at attractive prices. Alongside aggressive marketing campaigns by investment banks, the information asymmetry may complicate investing decisions.

With major AI companies preparing for public offerings in the coming months, market watchers emphasize disciplined investment strategies and prudence amid what some describe as an overheated market segment. They remind investors that IPO excitement can lead to overconfidence and that the best entry points may occur after the initial hype subsides.