SpaceX Traders Chased The Hype, Now They Face The Math

SpaceX shares continued to retreat after one of the most dramatic public market debuts in recent history, as investors weighed valuation concerns, dilution risks and the gradual normalization of trading conditions.

Key Points:

IPO Pullback

The stock closed last week near $185, well below the $225.64 high reached on Jun. 16. The decline followed an extraordinary rally that began after SpaceX debuted on Nasdaq under the SPCX ticker on Jun. 12, raising roughly $75 billion at a share price of $135.

The company's shares climbed about 67% in three sessions before reversing course. They then recorded their first back-to-back losses as a public company, falling 5% on Jun. 17 and another 3.6% the following day before markets paused for the Juneteenth holiday.

Much of the volatility stems from the stock’s unusually small public float. Only about 4% of shares are available for trading, while the remainder remain locked under a staggered release schedule that is expected to begin easing around the company’s first earnings report.

Such limited supply can magnify price swings in both directions. The same scarcity that fueled the initial rally is now intensifying selling pressure as sentiment cools.

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Valuation Questions

Investor sentiment shifted after two developments arrived almost simultaneously. On Jun. 17, put options on SPCX began trading, giving bearish investors a practical way to wager on a decline after short-selling had remained difficult because of limited share availability.

A day earlier, the company announced plans to acquire Anysphere, the creator of Cursor, in a $60 billion all-stock transaction. The deal raised concerns about dilution only days after the IPO.

The acquisition also renewed debate over valuation. At its offering price, SpaceX traded at a revenue multiple near 100 times sales, a figure many investors view as dependent on future growth from Starlink, Starship and the company's AI operations rather than current earnings.

Financial results remain under scrutiny. Starlink generated $11.4 billion in revenue last year, but average revenue per user fell to about $66 per month in the first quarter from $86 a year earlier. Meanwhile, the xAI segment reported a net loss of $4.9 billion.

Another factor investors continue to watch is governance. Elon Musk controls roughly 79% of voting power while holding about 42% of the company's equity, leaving public shareholders with limited influence over major strategic decisions.

The next major test may come as lock-up restrictions begin to expire. A stock that surged from $135 to more than $225 while only 4% of shares were available will face a different supply dynamic once a larger portion of holders can sell, potentially determining whether investors focus on Starlink’s cash generation or the long-term growth narrative behind the company.

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