Space stocks open with big losses as SpaceX goes public

Space stocks slumped after U.S. markets opened on Friday, despite an early-trading rally ahead of SpaceX's public debut. The sector has been highly volatile in recent weeks as investor interest in the offering swelled, and Friday's decline may reflect a rotation of capital into the sector's new public giant, Yahoo Finance writes.

Small-cap space stocks sold off sharply after the market open on Friday. Rocket Lab shares were up more than 6% in early trading, before swinging to an 11% loss after the regular session began, despite Nasdaq's decision to add the company to the Nasdaq 100 index. AST SpaceMobile also reversed lower after the open and is now down around 14%. Redwire shares are off around 11%. Virgin Galactic has plunged almost 35%, while the Procure Space ETF is down 7%.

SpaceX began trading Friday on the Nasdaq and Nasdaq Texas. The company raised $75 billion at a valuation of $1.77 trillion, marking the largest IPO in history. The name opened at $150 per share, $15 above the offering price.

Given the enthusiasm that lifted space stocks broadly ahead of SpaceX's debut, the selloff represents a sharp reversal, with traders shifting money out of listed space names and into the sector's new public giant, Yahoo Finance wrote.

Investors are recalibrating valuations across the sector in light of SpaceX's advantages in reusable rockets and launch cadence. According to the company, launch services revenue increased by $620 million in 2024, Falcon launches rose from 96 to 134, and Starlink deployments increased from 63 to 89.

Motley Fool analyst Rich Smith agrees that “investors wanting to buy SpaceX stock might sell shares of other space stocks to raise cash to buy SpaceX instead.” However, he argues that competitors should not be counted out yet: “tiny Redwire could still be a winner if it turns profitable before SpaceX does.”