• SpaceX’s stock fell below $135, its initial public offering price, wiping out investors' initial gains.

• The decline is attributed to profit-taking, a limited free float, and concerns over the company's high capital requirements.

• The expiration of lock-up periods for early shareholders in August could increase the supply of shares, putting additional pressure on the price.

• The upcoming 13th test flight of Starship is a critical technical trial expected to determine further stock market confidence.

• The company's trajectory is closely monitored, as it could influence future public offerings of other major technology companies.

• Just one month after the largest initial public offering ever conducted, SpaceX is facing its first serious test on Wall Street.

On Wednesday, the stock of Elon Musk's company fell below $135, the price at which shares were allocated during June's historic IPO. Intraday, it slipped even below $133 before moving back close to the $135 level.

The drop holds significant symbolism. Investors who acquired shares during the public offering found themselves, for the first time, facing book losses, while the gains the stock had recorded after entering the market were completely erased.

This development comes shortly before the 13th test flight of Starship, the rocket system on which much of SpaceX's future plans rely. Thus, yet another technical test is simultaneously transformed into a trial of market confidence.

From $200 Enthusiasm Back to $135

SpaceX listed on the Nasdaq on June 12, pricing its shares at $135.

The public offering raised approximately $75 billion and initially valued the company close to $1.77 trillion, making the IPO the largest in history.

The first stock transaction took place at $150, and investment interest quickly pushed the stock above $200.

At its highest point, SpaceX’s market capitalization temporarily exceeded $2.6 trillion, bringing the company close to or even above tech giants with decades of market presence and much stronger current financial results.

The picture, however, changed within a few weeks.

After the initial euphoria, the stock began to decline almost weekly. From levels above $200, it returned close to its listing price, losing more than a third of its value from June's highs.

Why SpaceX Stock is Falling

There is no single reason behind the decline.

A major factor is profit-taking by investors who bought early and saw the stock skyrocket within days.

At the same time, the market is re-evaluating whether SpaceX’s valuation is justified by its current financial metrics or if it is based primarily on big promises for the future.

The company recorded losses of approximately $4.9 billion last year, while a large portion of its plans requires massive investments without immediate or guaranteed returns.

These plans include the full development of Starship, manned missions to the Moon and Mars, the expansion of Starlink, new space infrastructure, and the company's ambitions in artificial intelligence and orbital data centers.

SpaceX also tapped the bond market to raise $25 billion, fueling some investors' concerns regarding the volume of capital that its future plans will require.

Only a Small Percentage of Shares are Traded

The high volatility is also linked to the structure of the stock listing.

Only about 4% of the total number of SpaceX shares is freely traded on the stock exchange.

This limited percentage, known as "free float," means that even relatively small buy or sell orders can cause large fluctuations in price.

The immense publicity surrounding Elon Musk, Starship, and the largest IPO of all time amplified these movements even further.

The initial rise may, therefore, have been larger than what was justified by fundamental financial data. In the same way, the current decline may be reinforced by the limited supply of shares rather than any material deterioration in the company's operations.

The Next Wave of Selling

Another factor troubling the market is the gradual expiration of lock-up periods applying to employees and early shareholders.

Following the announcement of SpaceX’s first financial results as a listed company, expected in early August, some employees and early investors will gain the ability to sell a portion of their shares.

This could significantly increase the supply of shares on the market and create additional pressure on the price, especially if several early shareholders choose to liquidate part of their gains.

On the other hand, an increase in the number of available shares could, in the long term, limit extreme volatility and lead to a more normal price discovery process.

Starship in Focus

The next big test for SpaceX will not take place on the stock market, but at the Starbase launch facility in Texas.

The company is preparing for Starship’s 13th test flight, the first since its stock market listing and the first since the failure of the Super Heavy booster rocket in May.

Starship is the most powerful rocket system ever built and is at the center of SpaceX’s long-term planning.

The company wants to turn it into a fully reusable system capable of carrying massive payloads and people into orbit, to the Moon, and, at a later stage, to Mars.

Its success is also critical for the launch of larger and more powerful Starlink satellites, as well as for NASA's Artemis lunar program.

Once Again, Without a Recovery Attempt

On the upcoming flight, SpaceX does not plan to attempt a recovery of the booster rocket or Starship's upper stage.

Instead, the two parts will perform controlled splashdown simulations in the Gulf of Mexico.

This means that both sections of the system will be destroyed at the end of the mission, even if they successfully complete all planned flight stages.

For SpaceX, the destruction of the vehicle does not necessarily equate to failure. For years, the company has followed a "fly, fail, fix" philosophy, gathering data from each test and rapidly applying changes to the next version.

For the stock market, however, things may be different.

Investors will carefully examine whether Starship manages to avoid new serious failures, as any delay could increase costs and push back the timelines on which a significant part of the current valuation depends.

Why the Decline Concerns Other Companies As Well

SpaceX’s course is also being closely monitored by other large private tech companies considering entering the stock market.

OpenAI and Anthropic are among the companies that have been linked to future IPOs, as they require massive capital to fund the development of artificial intelligence infrastructure.

A successful stock market trajectory for SpaceX could pave the way for other giant public offerings.

Conversely, a prolonged decline below the listing price could make investors more skeptical of companies with high valuations, large losses, and plans that require years to yield returns.

A Drop or a Return to Reality?

Slipping below the IPO price does not in itself mean that SpaceX is facing a crisis.

Several major companies have dipped below their listing price during their first months of trading before stabilizing or returning to an upward trend.

SpaceX remains the dominant company in commercial launches, possesses the Starlink network, and has developed rocket reuse technology that most of its competitors are still trying to match.

The decline, however, is the first indication that the market is no longer ready to value every new promise from Elon Musk without limits.

With the stock back near $135 and Starship on the launchpad, SpaceX is facing a double test: to prove it can advance technologically and, at the same time, justify one of the highest corporate valuations in the world.

Source: ink.com