SpaceX Market Valuation Drops $1 Trillion After Starship Launch Scrub

SpaceX began trading with great promise when its IPO opened at $135 per share, quickly drawing significant market attention. During its third day of trading, the company briefly surpassed Amazon and Microsoft in market capitalization, establishing itself as the fourth-largest publicly traded company.

However, the company’s stock value has since experienced substantial decline as market sentiment has shifted.

Key Market Performance Metrics

By Friday afternoon, SpaceX shares were trading at $125 per share, representing a 43% decrease from its record high of $225. The stock fell below its initial listing price for the first time on July 15.

The company has lost approximately $1 trillion in market capitalization, having reached a peak value of $2.7 trillion on June 16.

Short sellers have also aggressively targeted the company, with estimates suggesting they have taken positions in roughly one-third of its publicly available shares, according to CNBC.

SpaceX’s challenges intensified after canceling the 13th test flight of its Starship rocket on July 16 due to an engine ignition failure. The development of this 400-foot tall reusable rocket remains central to CEO Elon Musk’s strategy for reducing space travel costs.

“Next launch attempt hopefully in a few days,” Tesla CEO Elon Musk posted on X, indicating the next available launch window would be “early next week.” SpaceX shares dropped 6% during morning trading on Friday.

SpaceX stock volatility

Less than 5% of SpaceX’s shares are publicly available for trading, yet this limited supply attracted both retail and institutional investors given the significant enthusiasm surrounding the company’s IPO.

The company’s equity prices could face further pressure. SpaceX has implemented staggered lock-up agreements that prevent employees and early investors from selling their shares for specified periods, according to SEC filings. The vast majority of shares—approximately 95%—are subject to these lock-up restrictions, significantly limiting the publicly available supply.

A new tranche of shares is expected to enter the market following SpaceX’s second-quarter earnings report in early August, marking its first report as a publicly-traded company. An increased supply of shares on Wall Street could further depress SpaceX’s stock price if investor demand fails to meet the expanded availability.

Additional shares will be gradually released for public trading over the six-month period following SpaceX’s IPO date of June 12.

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Looking Ahead for SpaceX Shares

Despite these challenges, SpaceX has gained a listing on the Nasdaq-100 index and began trading accordingly on July 8.

The rocket manufacturing company’s inclusion in the Nasdaq is expected to drive substantial buying from passively-managed index funds and 401(k) retirement plans. While this won’t significantly alter market momentum, it could generate approximately $4.3 billion in passive inflows for SpaceX, according to Reuters.

Prominent analysts are beginning to acknowledge the company’s resilience. “SpaceX hangs in there,” CNBC host Jim Cramer noted in a social media post on Friday morning. “Odd.”

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Article Sources

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MarketWatch (1); The Wall Street Journal (2); CNBC (3); X (4), (9); U.S. Securities and Exchange Commission (5); CNN (6); Quartz (7); Reuters (8)

This article originally appeared on Moneywise.com under the title: Elon Musk’s SpaceX has lost $1T in market cap since mid-June as Starship launch is scrubbed

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