SpaceX shares fall below $135 IPO price for the first time since debut

SpaceX shares dropped below their initial public offering price for the first time on Wednesday, leaving investors who bought into the record listing sitting on paper losses just over a month after the debut that made Elon Musk the world's first trillionaire.

The stock fell as much as 2.9% to $132.15 during the session, breaking beneath the $135 a share at which the company sold stock in June, before recovering to close at $135.27. It was the fourth straight session of declines and the lowest level the shares have touched since the rocket, satellite and artificial intelligence company went public.

The drop marks a sharp reversal from the frenzy that greeted the listing. SpaceX raised about $86 billion in the biggest IPO in history on June 12, then watched its stock surge nearly 50% over the first three days of trading, peaking near $214 on June 17 and briefly carrying a valuation above $2.6 trillion, more than Microsoft or Amazon. It has lost value in almost every week since.

The unwinding has erased an enormous sum. From its high, the stock has fallen more than 38%, wiping over $800 billion off the company's value. SpaceX was worth about $1.75 trillion on Wednesday afternoon, down from the $2.6 trillion peak reached weeks earlier.

Musk's fortune has moved with it. Forbes estimated his net worth at about $856.8 billion on Wednesday, down sharply from a high of $1.45 trillion shortly after the debut. He remains the richest person in the world by a wide margin, and he controls the company through a stake variously reported at 38% to 42% and a dominant share of the voting rights, so the selloff costs him money but not control.

Part of the volatility is structural. Only about 4% of SpaceX's shares trade on the Nasdaq, an unusually small float that, combined with relentless attention on the company, has produced wild swings. Thinly traded stocks move further on each buy and sell order, and analysts say early investors cashing out to lock in gains have added downward pressure.

The rest reflects a change in mood. Markets have cooled on the artificial intelligence trade that lifted SpaceX and its peers, with investors moving from what one analyst called pricing in promise toward closer scrutiny of the companies actually linked to AI. SpaceX has staked much of its valuation on that theme. It acquired Musk's AI startup xAI in an all-stock deal in February, spent $7.7 billion on AI-related capital expenditure in the first quarter, roughly three-quarters of its total, and has told regulators it could deploy space-based data centers as early as 2028.

The company's induction into the Nasdaq-100 last week, achieved under a rule change that shortened the eligibility window for newly public companies to 15 trading days, brought passive index funds into the stock but did not halt the slide. The shares fell below their first-day trading level within a day of joining the index.

Wall Street analysts remain broadly bullish despite the drop. The consensus price target sits around $247, well above the current level, with roughly 80% of analysts rating the stock a buy or overweight. Supporters argue the valuation reflects years of large investments still to come, and that the company's ambitions in launch, satellite internet and AI justify patience. Skeptics counter that the price ran far ahead of the fundamentals.

Beneath the market drama, SpaceX's core business continues to generate the revenue that underpins the valuation. Starlink, its satellite internet service, is the largest contributor, and it has expanded across much of the world, including more than two dozen African markets. The service remains unavailable in South Africa, the country of Musk's birth, where it has not met a requirement that licensees be at least 30% owned by historically disadvantaged groups, a standoff Musk has publicly criticized.

The selloff comes at a sensitive moment. SpaceX is due to launch the 13th test flight of its Starship rocket on Thursday, carrying Starlink satellites that will attempt to connect with ground stations in South Africa. The share price has become a real-time referendum on the ambitions Musk has attached to the company, and a prolonged downturn could ripple outward, weighing on the bonds SpaceX sold after the IPO and setting a cautious tone for the listings of other AI-linked giants, including Anthropic and OpenAI, both of which have filed confidentially to go public.

Whether Wednesday's dip hardens into a sustained decline or proves another swing in a volatile first month will shape how those offerings are received. What has already changed is the story investors tell about SpaceX. A month ago it was the hottest debut in market history. It is now a stock trading below the price at which it sold.