SpaceX lost $1.2 trillion in market capitalization before its stock rebounded from its low
Since its peak on June 16, SpaceX’s market capitalization has fallen by more than $1.2 trillion—the same as Tesla’s market capitalization / Photo: X / SpaceX
SpaceX shares—before rebounding during trading on July 28—had lost 20% of their value since their record-breaking debut on the Nasdaq, according to Bloomberg. At the opening of Tuesday’s trading session, the stock plummeted 5% to $107.8, marking a new low. At the time of publication, the stock had rebounded to $116.3, up 2.5%.
However, before the recovery began—the company’s market capitalization had fallen by more than $1.2 trillion from its June 16 high—this was one of the largest declines in market capitalization in history, according to Bloomberg. By comparison, Tesla’s market capitalization currently stands at $1.2 trillion.
In recent weeks, major tech companies have been hit by a combination of a volatile geopolitical situation and investor concerns about AI spending. In addition, SpaceX investors are also assessing the potential implications of an unusual phased lock-up release schedule for early investors and insiders following the IPO: As early as August 6, up to 911.5 million shares will become available for trading, according to Bloomberg. By comparison, there are currently about 639 million SpaceX shares in free float. However, the unlocking of shares does not necessarily mean that insiders will sell them.
By the end of the year, the number of shares available for trading will rise to 5.33 billion, according to SpaceX's IPO prospectus.
SpaceX’s high valuation and preparations for a potential wave of sales over the past month have attracted a large number of short sellers, according to Bloomberg. According to S3 Partners, about 30% of the shares available for trading are currently held in short positions. This skepticism has already yielded short sellers nearly $8 billion in unrealized gains, as the stock is trading 42% below its record closing high from June 16, the agency notes.
Preparations for the initial public offering of SpaceX shares have sparked debate among investors and analysts over how far the stock price might fall. Bearish traders are targeting the $100-per-share level. A drop to that level would imply a zero or even negative valuation for SpaceX’s AI segment, Morgan Stanley analyst Adam Jonas wrote Friday in a note cited by Bloomberg.
According to MarketWatch, 28 out of 37 analysts tracking shares of Elon Musk’s space company currently recommend buying them. Another seven recommend holding the stock, while two suggest selling. The Wall Street consensus price is $236.7, which is 105% higher than Monday’s closing price.
This article was AI-translated and verified by a human editor
