SpaceX shares have fallen below their IPO (Initial Public Offering) price, raising concerns among investors who bought the stock during its market debut. The company’s shares closed at $136.08 on Tuesday, just above the IPO price of $135, and later slipped below that level. The IPO price is important because it is the price at which investors first bought the company’s shares when it went public.
Falling below the IPO price is seen as a negative sign because it means early investors are now losing money on their investment. SpaceX had a very strong stock market debut. The company completed the world’s biggest IPO and raised more than $85 billion after the overallotment option was exercised, according to The Motley Fool.
SpaceX stock rally explained
The IPO attracted huge demand from both retail and institutional investors, making it heavily oversubscribed. The stock started trading at $150 per share. It quickly rose to $225 on June 16, giving investors a gain of about 50% in just a few days. But after reaching that high, the stock started falling and has dropped sharply over the last few weeks.
According to Bloomberg, the stock has fallen by almost one-third from its highest price after the IPO. This has erased nearly $850 billion in the company’s market value. SpaceX was already very popular with investors before its IPO because of its space technology business and the leadership of Elon Musk. The company has three main businesses: rocket launches, satellite internet services, and artificial intelligence.
Why investors liked SpaceX
Investors think these businesses could make a lot of money in the future if the company’s long-term plans work out. SpaceX also has big future plans. It wants to build data centers in space and one day help people live on Mars. The company is also using reusable rockets, which can be used many times. This could lower the cost of space launches and make it cheaper to run its other space projects.
Elon Musk is one of the main reasons many people want to invest in SpaceX. Some investors do not agree with all of his plans, but many others believe in his vision for the future. SpaceX also continued to grow last year. According to The Motley Fool, the company made more than $18 billion in revenue, which was over 30% higher than the year before.
Even though SpaceX made more money, the company still lost $4.9 billion. This is because it is spending a lot of money to build new space technology. The company may continue spending heavily because making advanced space technology is very expensive. Later this year, SpaceX plans to launch its fully reusable Starship rocket with payloads. This will be an important step for the company’s future plans.
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Why SpaceX stock is falling
Market experts say falling below the IPO price can damage investor confidence, especially when it happens only weeks after a company’s stock market debut. Analysts also believe the stock is expensive. Bloomberg reported that SpaceX is trading at a forward price-to-sales ratio of more than 30 times, one of the highest among Nasdaq-100 companies. Another concern is the company’s lock-up period. As the lock-up ends, insiders will be allowed to sell more shares, increasing the supply of stock in the market.
Ken Mahoney, CEO of Mahoney Asset Management, said he does not believe the stock has reached its lowest point yet. He said investors should watch whether enough buyers are willing to purchase the additional shares entering the market, according to Bloomberg. Even after the recent decline, Wall Street remains largely optimistic about SpaceX. More than 80% of analysts covering the company have Buy ratings on the stock.
The average analyst price target is $236.25, which is over 70% higher than Tuesday’s closing price. Several major investment banks, including Morgan Stanley, JPMorgan Chase and Goldman Sachs, started coverage with positive ratings. SpaceX was recently added to the Nasdaq-100 Index through the exchange’s fast-entry rules, another major milestone for the company.
What history says about IPOs
Market experts say large price swings are common for newly listed technology companies, according to Bloomberg. A Truist Wealth study of 30 major technology IPOs found that these companies experienced an average maximum decline of 55% during their first year of trading. The Motley Fool also looked at the performance of 10 major IPOs and found that eight of them fell during their first year on the stock market.
Seven of those companies posted double-digit losses, while the average decline was around 12%. The report said that if SpaceX follows this historical trend, a $10,000 investment made near the IPO could be worth about $8,800 after one year. The history suggests investors should not rush into IPO stocks, as better buying opportunities may appear after the initial excitement fades. Bloomberg noted that many of the biggest U.S. IPOs this year have also struggled. Six of the ten largest offerings are now trading below the price at which they closed on their first trading day.
What’s next for SpaceX stock
The overall performance of U.S. IPOs in 2026 has weakened. Bloomberg data showed the average return for this year’s IPOs had fallen to 5.3% through July 13. Some market strategists believe the recent fall could attract bargain hunters. Investors who missed the IPO may see the lower share price as a buying opportunity.
Talley Leger, chief market strategist at Wealth Consulting Group, said he may consider buying SpaceX shares if the stock falls further, because he likes the company’s long-term vision, according to Bloomberg. For now, investors are closely watching whether SpaceX can recover above its IPO price or continue its recent downward trend.
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