Briefing
- SpaceX shares fell 1.5% to $134 on Wednesday, breaking below their $135 IPO price for the first time since the company's June 8 Nasdaq listing.
- The stock declined a further 4% in premarket trading on Friday after a crucial launch was postponed, according to MarketWatch.
- The IPO, priced at $135 per share, raised approximately $75 billion before expenses, with shares reaching a post-listing high of $176.52 on the first day of trading, according to TheStreet.
- The stock has lost more than $800 billion in market value from its post-IPO closing high, with the Financial Times reporting the sell-off has wiped $1 trillion from the company's value.
- Short-sellers have swarmed the stock, with paper profits on bearish positions reaching $8.7 billion, according to Reuters, a figure previously reported by Bloomberg as nearing $4 billion.
- Ark Invest's Cathie Wood has been buying the dip as the stock tests its IPO price, according to Barron's.
Analysis
- A break below SpaceX's $135 IPO price would intensify regulatory and governance scrutiny of the Nasdaq-100 inclusion decision itself, creating reputational risk for the index and its passive vehicle sponsors. If retail buyers who purchased at or above IPO price are sitting on losses, the political narrative around Musk-affiliated assets receiving preferential index access becomes a live liability for Nasdaq and ETF providers tracking the index.
- ASTS and RKLB face compounding sector headwinds independent of SpaceX's IPO dynamics: the Chinese rocket milestone cited in the same session as their declines signals a competitive threat to commercial launch and low-earth-orbit connectivity economics, and the oil spike adds a macro risk-off overlay. With the Fed's Waller flagging potential rate hikes contingent on this week's inflation print, high-duration, pre-profitability space names are the most exposed segment if the short end reprices upward.
- The $800bn drawdown from a $2.67 trillion peak, combined with analyst George Noble's 'built to separate retail investors from their money' characterisation gaining wide circulation, raises the probability that SpaceX's Nasdaq-100 inclusion becomes a case study referenced in Congressional or SEC debates over index inclusion standards for non-traditional listings. This feeds directly into the broader regulatory pressure on AI and tech governance already building from the Nobel laureate economist letter.
Historical Context
- 2022-2023
The SPAC collapse cycle saw dozens of high-profile space and EV names including Virgin Galactic (SPCE) lose more than 90% from peak, establishing a precedent for retail destruction in speculative space-sector vehicles and providing the valuation context Noble's 'separate retail investors' characterisation now invokes.
- 2021
Rivian priced its IPO at $78 and surged to over $170 within weeks before collapsing below its IPO price within months, triggering scrutiny of EV retail participation and underwriter conduct. The mechanical parallel to SpaceX is a high-profile tech-adjacent listing where retail enthusiasm drove valuations well above fundamentals before a full round-trip loss.
- Aug 2018
Tesla's 'funding secured' tweet triggered SEC action and a CEO fine, demonstrating that high-profile tech founder communications around listing and valuation can escalate from market events into regulatory proceedings, a channel relevant if SpaceX's political donations and Nasdaq-100 inclusion attract joint scrutiny.
Connected Events
SpaceX President Gwynne Shotwell donates $325m in SpaceX stock to Trump Accounts
Gwynne Shotwell's $325 million SpaceX stock donation to Trump Accounts, implying a per-share price of roughly $162.50, now sits materially above the $135 IPO reference price the stock is approaching, creating an awkward optics problem: a politically prominent gift was valued at a price that public buyers are now approaching as a loss threshold.
Fed's Waller warns hot inflation print could trigger rate hike
Fed Governor Waller's explicit rate-hike warning ahead of this week's inflation print compounds the drawdown risk for SpaceX and related high-duration space names: a hot print that forces markets to price a bimodal hold-or-hike distribution removes the rate-cut tailwind that had supported speculative growth valuations at the top of SpaceX's $2.67 trillion peak.
SK Hynix raises $26.5bn in blockbuster US share offering debut
The same session that saw ASTS fall 5% and RKLB shed 4% was also marked by the US-Iran oil spike, which the SK Hynix listing story identified as a macro headwind snapping the Nasdaq's three-day winning streak. The oil-driven risk-off move is acting as a sector-agnostic amplifier of individual stock-specific weaknesses across speculative growth names.
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