SpaceX Stock Has Already Lost 35% of Its Peak Value and It's Been One Month

From the Biggest IPO Ever to 'It Looks Like a Meme Stock'

Here's the thing about historic moments. They have a way of looking a lot less historic in the rearview mirror.

When SpaceX shares hit the public market on June 12th, the BBC reports the price was set at $135 per share. By the end of that first day it was sitting at $160.95, after briefly touching $176. The following week it climbed to an intraday high of $225, briefly pushing SpaceX past Amazon and Microsoft in total market valuation. People were losing their minds.

As of the end of its first full month of trading, SpaceX shares were going for around $145 each. That's roughly 18% below its first-day high and 35% below its peak. And Keith Snyder, an analyst at investment research firm CFRA, did not mince words about what that pattern looks like. "It started to look a lot like a meme stock," he told the BBC, putting SpaceX in the company of GameStop and, more recently, Wendy's.

Snyder's current price target for SpaceX sits at around $115 a share, which would put the company's total value at approximately $1.5 trillion. From a $225 high. In one month.

Everyone Bought an AI Story. They Got a Rocket Company.

Look, the SpaceX IPO frenzy was never really about rockets. Analysts who spoke to the BBC made that abundantly clear.

"Everyone saw SpaceX as an AI story," said Willy Lee, an investor at Neosteller, which helps individuals put money into private companies before they go public. Keith Snyder agreed: "This was also the first time people felt like they were able to invest in something that was being marketed as an AI play."

That framing wasn't entirely fabricated. Earlier this year SpaceX acquired Musk's AI startup xAI, recently renamed SpaceXAI, which is best known for the controversial chatbot Grok. The company also started leasing data centre capacity to other tech firms. So the AI pitch had some bones to it.

But SpaceX's actual business is manufacturing rockets and selling Starlink satellite internet subscriptions. When Starlink announced it was cutting prices in the Memphis area amid local pushback over a data centre project, SpaceX shares dropped 8% in a single day. Reality, as it turns out, is a pretty effective cold shower.

Musk Used the Spike to Buy a $60 Billion Company for Free

While retail investors were riding the hype wave off a cliff, Musk was doing something else entirely with that inflated stock price.

On June 16th, right when shares spiked to their highest point, SpaceX announced it was acquiring Cursor, an AI startup that built a coding assistant bot, in an all-stock deal valued at $60 billion. The BBC reports that because SpaceX stock had gained so much value at exactly that moment, Musk essentially bought the company for nothing. Samuel Kerr, who heads equity capital markets analysis for Mergermarket, called it "a level of market sophistication that almost no other issuer has."

Sophistication is one word for it. Another word is timing. A third word, depending on how you feel about retail investors getting torched while the founder uses their excitement as a shopping voucher, might be something less flattering.

Who's Actually Fine and Who's Holding the Bag

Not everyone is in the same boat here, and the BBC's reporting makes that distinction worth spelling out clearly.

If you were an institutional investor who got in at the $135 IPO price, or an insider with pre-IPO equity, Kerr says you're okay. You're sitting on a modest gain or at worst breaking even. "If you're an IPO investor, you're ok," he said flatly.

"If you bought in the first few days, you're not very happy right now." That's Kerr again, describing the retail investors who piled in during the first week of euphoria, when the price was anywhere from $160 to $225. Those people are sitting on losses that, if Snyder's $115 target proves accurate, could get significantly worse before they get better.

When SpaceX joined the Nasdaq100 index on July 7th, the index itself closed down 1.7%. SpaceX fell 4.4% on the same day. The lock-up period, when SpaceX employees are prohibited from selling their compensatory shares, is expected to end around the company's first public earnings report in early August. More shares hitting the market at the same time as a detailed look at the actual financials could push the price around dramatically in either direction.

Morgan Stanley Thinks This All Goes to $300. Sure.

Here is where we should acknowledge that not everyone sees doom.

Morgan Stanley, which was one of the lead banks on the SpaceX IPO and therefore has a vested interest in not saying the thing they helped sell is in trouble, last week initiated analyst coverage with a target price of $300 per share. That would be a 33% jump from the highest price SpaceX has ever actually traded at, according to the BBC.

Musk himself has projected that SpaceX will pull in $1 trillion in annual revenue by 2030. The BBC notes that SpaceX currently operates at a loss and brought in $18 billion in revenue last year. One trillion dollars is roughly 55 times that figure. The company has four years to close a 55x revenue gap while operating in the red. So: possible. Technically.

"If SpaceX can do all the things it says it will do, yes, investors are sitting on the most valuable company ever," Kerr told the BBC. He then added, with what reads like heroic understatement, "But it's got a lot of work to do to get there."