SpaceX shares have experienced a dramatic 15% decline from their post-IPO peak, closing near $115 last week and marking a new post-IPO low. The stock has now erased about $500 billion from its June peak, trading well below the $135 IPO price for the first time. The aerospace giant, which raised $75 billion in one of the largest IPOs in history, has gone from being the belle of the IPO ball to sitting alone at the table as its stock price craters below its own offering price. For investors who bought at the peak, roughly half their investment has evaporated in about five weeks since the June 12 debut.
According to recent reports, three factors contributed to the recent decline: Starship development challenges, rival Blue Origin's successful fundraising, and China's achievement of landing a Long March 10B booster in a net on a sea platform on July 10. This marked only the second country to bring an orbital booster home, with China about a decade behind SpaceX's December 2015 achievement. The stock fell 6.7% on July 22 to $115.26, representing roughly 49% below the June high of $225.64. The company is now worth about $1.52 trillion, with the decline already wiping $500 billion from Elon Musk's fortune.
Two critical dates in August will determine SpaceX's near-term trajectory. The company reports earnings for the first time on August 4, followed by a significant unlock of shares on August 6. As per recent analysis, when SpaceX listed, insiders signed lock-up agreements that prevent selling for a set period. Once results are out, up to 911.5 million shares become free to trade, with the stock currently trading near $115 making it impossible to meet the $175.50 threshold required for the second batch of 455.8 million shares to unlock. Roughly half the expected August supply is already gone due to this requirement, significantly reducing the amount of stock hitting the market.
According to Morgan Stanley analyst Adam Jonas, the current selloff has driven SpaceX shares near a valuation that would imply investors are assigning zero value to its artificial intelligence business. As per Morgan Stanley, many investors expect the stock price to fall further and hit $100 per share when a lockup on the first batch of shares unlocks next month, allowing some insiders to sell. "We believe the current disconnect between increasingly bearish investor sentiment and largely unchanged fundamentals creates an attractive entry point in SpaceX shares," Jonas wrote in a note to clients. The analyst maintains a $300 price target, with more than 50% ascribed to the company's AI segment, arguing that most investors significantly discount the Grok & Cursor AI business due to high capital expenditure requirements and uncertain economics.
Despite the current selloff, Wall Street remains overwhelmingly bullish on SpaceX, with nearly 80% of analysts covering the company recommending buying shares, according to data compiled by Bloomberg. The average price target of about $232 implies the stock will more than double from current levels. Analysts from Goldman Sachs, Bank of America, Citigroup, and JPMorgan - the other four banks who led SpaceX's offering with Morgan Stanley - all have issued buy-equivalent ratings on the stock. Morgan Stanley's Jonas, who is best known for being a longtime Tesla bull, maintains his bullish call with a $300 price target, counting among the most bullish analysts on Wall Street when it comes to SpaceX. He reiterated his buy-equivalent rating, stating that "SpaceX remains uniquely positioned across launch, connectivity, and AI" and sees the current valuation as an attractive entry point.
