July 15 (Reuters) – SpaceX shares dropped below their initial public offering price on Wednesday, a first for the company, just over a month after a frenzy over the rockets-to-AI firm powered the biggest IPO ever and made Elon Musk the world’s first trillionaire.
Its shares slid 1.9% to $133.5, falling below the $135 apiece IPO price and well below the all-time high of $225.64 that had propelled the company’s market valuation briefly above those of Silicon Valley giants Microsoft and Amazon.
The decline leaves investors who bought into the company at the IPO price sitting on paper losses for the first time, potentially testing confidence in the stock.
It also offers a reminder that Wall Street enthusiasm can cool quickly, even for a company with the size and scale of SpaceX, which raised around $85.7 billion and fetched a valuation of around $2.1 trillion at the end of its first trading day.
It is not uncommon for a stock to fall below the IPO price, especially during periods of broader market stress.
Wall Street’s main indexes have been under pressure in recent weeks due to uncertainty around the U.S. Federal Reserve’s interest rate path and concerns about the durability of the rally powered by AI winners such as chipmakers.
Still, the drop may be a symbolic setback and could bolster critics who had argued that SpaceX’s valuation was stretched, as the company lost $4.9 billion last year and many of its ambitious bets are still untested.
“There hasn’t been anything that lately to remind people of some of the catalysts for why they bought SpaceX,” said Steve Sosnick, chief market analyst at Interactive Brokers.
“The fact that a stock has fallen a couple of dollars below its IPO price in itself is not a tragedy, but SpaceX is heavily watched and has an important role in investor psyche.”
Investors would find better entry points after the first wave of excitement had faded, some analysts had warned before the IPO.
The reversal also underscores the risks of chasing momentum, and the limits of a valuation driven more by narrative than near-term fundamentals.
“I think some traders got impatient. They chased the stock, and it’s rarely a good thing to chase a stock,” Sosnick said.
The stock’s addition to prestigious indexes, such as the tech-heavy Nasdaq 100, did little to reignite the buying. SpaceX’s shares have dropped nearly 13% since they were included in the Nasdaq 100.
The focus now shifts to the company’s first results after listing. SpaceX has not yet disclosed when it plans to do it, but has said they will be released only through its website and its social media account on X, and not through wire distribution services.
After the report, the first phase of the IPO lock-up period is set to expire, allowing eligible employees and some early shareholders to begin selling portions of their holdings, an event that analysts say could weigh further on the stock.
Investors are also closely watching the company’s 13th Starship test flight as the rocket’s successful development is critical to lowering launch costs and enabling many of its most ambitious long-term projects, including orbital data centers and lunar missions.
(Reporting by Niket Nishant, Shashwat Chauhan, Johann M Cherian, Akash Sriram and Avinash P in Bengaluru; Editing by Sriraj Kalluvila and Pooja Desai)
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