Here’s Why SpaceX Stock Price is in a Steep Freefall After the IPO

Key Insights

• SpaceX stock has crashed by double digits from the highest point last week.
• The retreat happened amid the ongoing profit taking among investors.
• The company sold its first bonds after going public earlier this month.

SpaceX stock price has suffered a big reversal in the past few days, falling from the post-IPO high of $225 to the current $154. This retreat has erased close to $1 trillion in value, with Elon Musk’s wealth tumbling by $152 billion on Monday alone. This article explores some of the top reasons behind the SPCX stock crash.

SpaceX Stock Has Crashed Amid Profit-Taking

SPCX stock surged hard after its IPO as retail and institutional investors rushed to buy it. Indeed, while the company raised $86 billion in its IPO, brokers received orders worth over $200 billion.

Now, however, there are signs that some of these investors are starting to book profits as the IPO hype fades. This is not a new phenomenon. Indeed, data shows that 91% of all newly listed companies surge and then pare back some of the gains after a short period.

A good example of this is all the top companies that went public in the past few months. Most of them, including Circle Internet Group, Figma, and Gemini Space Station.

Circle is the best example because it launched its IPO when there was substantial hype about stablecoins. President Donald Trump had just signed the GENIUS Act into law. As a result, it soared to $300, and then quickly unraveled as investors like Cathie Wood started to book profits.

Other actions have contributed to the ongoing SPCX stock crash. For example, after raising $75 billion in its IPO, the company announced a $60 billion Cursor buyout to boost its AI business. It is often common for stocks to drop whenever companies make large buyouts.

The company also announced a major $20 billion bond sale after its IPO. It now plans to use some of this cash to fund its Cursor acquisition and also boost its AI business.

Additionally, there have been concerns about its valuation. These concerns became pronounced after it released its S1 filing, which showed that it its business was making significant losses. Its net loss jumped to close to $5 billion last year.

Potential Catalysts for SPCX Stock

The ongoing SpaceX stock crash is bad, but it is does not mean that the company is doomed. Indeed, the retreat may create a good entry point for long-term investors if history repeats itself.

A good example of this is Meta Platforms, formerly known as Facebook. It initially surged to $42.8 after its IPO in 2012 and then dropped to $16.75 a few days later. It then went on to hit a record high of $800 in 2025.

SpaceX has some notable drivers that may boost its shares over time. For example, it has one of the biggest total addressable markets (TAM) across all its businesses. Its satellite launch business has a large market share, while Starlink leads in the satellite broadband market.

The company has also become a major name in the AI data center industry. On Monday, it unveiled a $6.3 billion deal with Reflection AI, which will use its data centers. It also recently reached a deal with Google, which will pay it $920 million a month for computing power.

Its recent Cursor buyout is also notable as it is one of the fastest-growing companies in the AI industry. The company is now making an annualized run rate (ARR) of $4 billion, more than double what it was doing earlier this year.

SpaceX also has a room to grow its AI business, which will become highly valuable as a standalone one. For example, Anthropic has already reached a $900 billion valuation, while OpenAI has $850 billion. Grok’s valuation will likely keep growing in the coming years.

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