SpaceX Stock Falls 42% From Peak and Breaks Below IPO Price

Key Takeaways

• SpaceX stock closed at approximately $131.11 on Thursday, falling below its $135 IPO price for the first time.
• Shares have lost around 42% since reaching a post-listing high above $225 in June.
• The initial rally was amplified by intense investor demand and a public float representing only about 5% of the company’s shares.
• Investors are now focusing more closely on SpaceX’s valuation, losses, capital requirements and exposure to the highly speculative AI sector.
• Upcoming lock-up expirations could increase the number of shares available for trading and create further selling pressure.
• The aborted 13th Starship flight added operational uncertainty, although the stock decline began before the launch attempt.

SpaceX Shares Extend Their Post-IPO Retreat

SpaceX stock extended its post-IPO retreat on Thursday, closing below its offering price as investors continued to unwind one of the most aggressive listing rallies of 2026.

Shares of Space Exploration Technologies Corp., trading under the ticker SPCX, ended the session at approximately $131.11. That put the stock below the $135 price set for its June 12 initial public offering and marked its fifth consecutive daily decline.

The move represents a sharp reversal from SpaceX’s first days as a public company. After briefly climbing above $225, the stock has now lost roughly 42% from its record high. The decline reflects a broader reassessment of the company’s valuation, financial performance and near-term share supply rather than a sudden deterioration in its long-term aerospace business.

Why Is SpaceX Stock Falling Below Its IPO Price?

The most immediate pressure came from a wider sell-off in technology and artificial intelligence-related stocks.

On Thursday, the Nasdaq 100 declined approximately 1.6%, while the Philadelphia Semiconductor Index dropped more than 4%. The retreat was especially severe among companies and funds associated with the AI infrastructure trade, which had delivered some of the strongest market gains earlier in the year.

SpaceX is no longer valued solely as a rocket-launch and satellite communications company. Following its acquisition of xAI in February, the business also includes the Grok AI platform and other technology operations connected to Elon Musk. SpaceX described the transaction as an effort to combine aerospace, satellite communications and artificial intelligence capabilities under one organisation.

That positioning helped attract investors seeking exposure to both the commercial space industry and AI. However, it also means the stock is vulnerable when market sentiment turns against highly valued technology companies.

The latest decline therefore appears partly connected to a broader rotation away from speculative growth shares rather than a SpaceX-specific event.

Post-IPO Excitement Is Fading

SpaceX’s initial rally was driven by extraordinary demand for a limited supply of publicly traded shares.

The company priced its IPO at $135 per share and offered approximately 555.6 million shares, targeting a record capital raise of around $75 billion. The transaction valued SpaceX at approximately $1.75 trillion before its first day of trading.

Shares rose 19% during their Nasdaq debut and continued climbing over the following sessions. At one stage, SpaceX’s market capitalisation exceeded $2 trillion, placing the company alongside some of the largest publicly listed businesses in the United States.

However, only about 5% of the company’s total shares initially entered the public market. That small float meant strong demand from retail investors, institutions and index-tracking funds had to compete for a relatively limited number of shares.

The same mechanism that accelerated the rally can now amplify the decline. When demand weakens, a thinly traded stock can move rapidly because fewer shares are available to absorb changes in buying and selling activity.

The retreat below the IPO price suggests that investors are no longer willing to pay an additional premium simply to gain early exposure to the newly listed company.

Valuation and Losses Return to Focus

As the publicity surrounding the IPO fades, attention is shifting towards SpaceX’s underlying financial performance.

The company reported revenue of approximately $18.7 billion for 2025, representing growth of around 33% from the previous year. However, the combined business recorded a net loss of about $4.9 billion after incorporating the financial results of xAI.

SpaceX continues to generate substantial revenue from Starlink subscriptions, satellite launches and government contracts. These operations give the company a more established commercial base than many early-stage aerospace businesses.

Nevertheless, SpaceX also faces unusually high spending requirements. Expanding the Starlink satellite network, developing Starship, building launch infrastructure and funding xAI all require significant amounts of capital.

The sell-off therefore reflects a shift from valuing SpaceX primarily on its future potential to examining how quickly that potential can translate into sustainable earnings and cash flow.

Lock-Up Expiration Raises Share-Supply Concerns

Potential selling from employees and early investors has become another important issue for SpaceX stock.

Lock-up agreements normally prevent insiders from selling shares immediately after an IPO. These restrictions are designed to avoid a sudden increase in supply during the first weeks of public trading.

For SpaceX, the first major release could occur after the company publishes its first post-IPO quarterly earnings report, which is expected in early August. Reuters reported that approximately 911.5 million shares could become eligible for sale during the initial release period. At recent market prices, those shares would represent more than $100 billion in potential trading supply.

Not all eligible shareholders will necessarily sell. However, the possibility of additional supply can pressure a stock before the restrictions actually expire, particularly when the current public float is unusually small.

Investors may also be reducing positions in advance because they expect employees, founders or early financial backers to realise some of their gains once they are permitted to trade.

Nasdaq 100 Inclusion Fails to Reverse the Decline

SpaceX recently joined the Nasdaq 100, an event that would normally be viewed as supportive for a newly listed technology company.

Index inclusion requires exchange-traded funds and other passive investment products tracking the Nasdaq 100 to purchase the stock. That creates automatic institutional demand and can improve market liquidity.

However, SpaceX shares continued falling after the announcement. The most likely explanation is that traders had already anticipated index-related buying and positioned themselves before the official inclusion.

Once passive funds completed their purchases, there was no additional catalyst to extend the rally. This is a common market pattern in which investors buy ahead of an expected event and sell after it occurs.

Wall Street analysts also remain divided. Several brokerages have issued bullish ratings based on Starlink’s growth and Starship’s long-term commercial potential, while others have adopted neutral or negative positions because of valuation risks. Reported price targets range from $115 to as high as $800, illustrating the unusually wide range of possible outcomes assigned to the company.

Starship Launch Abort Adds Operational Uncertainty

SpaceX’s 13th Starship flight attempt was aborted on Thursday moments before liftoff from Starbase, Texas.

On-screen data showed that four of the Super Heavy booster’s 33 engines did not ignite. The remaining engines were then automatically shut down, preventing the rocket from leaving the launch platform. Elon Musk later said that two engines would be replaced before another launch attempt, which could take place early the following week.

The safety system appears to have operated correctly, meaning the event was not necessarily a major technical failure. Nevertheless, the delay highlights the execution risks attached to Starship, which is central to many of SpaceX’s most ambitious forecasts.

Future Starship operations are expected to support satellite deployment, lunar missions and potentially large-scale orbital infrastructure. NASA is also relying on a modified Starship vehicle for future Artemis lunar missions.

Importantly, SpaceX stock had already closed below its IPO price before the full implications of the aborted launch were reflected in regular trading. The launch issue should therefore be viewed as an additional source of uncertainty rather than the main cause of the five-day sell-off.

What Could Happen Next to SpaceX Stock?

SpaceX stock may remain volatile as investors wait for the company’s first quarterly results as a publicly traded business.

Revenue growth, operating expenses, Starlink customer trends and xAI-related losses are likely to receive close attention. Investors will also examine any revised guidance for Starship development and future capital expenditure.

A strong earnings report could restore confidence that SpaceX’s commercial businesses are expanding quickly enough to support its valuation. Conversely, larger losses, slower revenue growth or rising development costs could reinforce concerns about profitability.

The upcoming lock-up releases may also continue to influence sentiment. Even when the company reports favourable operational developments, investors may hesitate to build large positions until there is greater clarity over how many insider shares will enter the market.

The fall below $135 does not determine SpaceX’s long-term prospects. It does, however, show that the stock is now being evaluated more like a public company and less like a scarce opportunity to participate in Elon Musk’s space ambitions.