SpaceX stock dips below $135 IPO price as lockup expiry looms, wiping out post-listing gains

The price drop

SpaceX shares fell below their $135 initial public offering price on July 15, a month after the largest IPO in U.S. history raised $75 billion. The stock hit an intraday low of $132.15 before closing at $135.27, down 33% from its record close of $225 on June 16. The decline has erased more than $1 trillion in market capitalization, leaving the company valued at roughly $1.8 trillion. Elon Musk, who briefly became the world's first trillionaire after the listing, saw his fortune drop to $856 billion, according to the WirtschaftsWoche. The stock had been boosted by inclusion in FTSE Russell indices and the Nasdaq 100, which was adjusted to admit SpaceX quickly, creating passive demand from index funds.

Why the selloff

Investors are reassessing the premium assigned to a company that reported a net loss of $4.9 billion in 2025 and $4.3 billion in the first quarter of 2026. Only the Starlink satellite internet business is profitable; the rocket launch division covers most of its costs, while the artificial intelligence unit, absorbed from Musk's xAI earlier this year, is losing billions. The company does not expect positive cash flow until 2029 at the earliest. The stock trades at 49 times expected revenue, compared with 15 times for Tesla, another Musk-backed company. Rising interest rates have also made unprofitable growth stocks less attractive, as future cash flows are discounted more heavily.

The laws of balance-sheet gravity have caught up with the space sector again. The fall of the SpaceX share below the issue price is a clear warning signal for unprofitable growth stocks in the current interest rate environment.

Skepticism about AI spending has added to the pressure. SpaceX's IPO prospectus cited a $26.5 trillion addressable market for its AI business, but some investors now question whether the heavy investments in computing capacity will pay off. The fortunes of AI companies and their suppliers depend heavily on just two model builders, OpenAI and Anthropic, and there are signs that growth at OpenAI may be slowing, the Neue Zürcher Zeitung reported.

Lockup and supply overhang

A key near-term risk is the expiry of insider lockup restrictions in early August. The IPO made less than 5% of shares available for trading, creating scarcity that drove the initial rally. When lockups lift, a larger number of shares could hit the market, potentially depressing the price further. The stock's early surge was also fueled by retail investors, including customers of German brokers such as Trade Republic and Flatex, who were able to subscribe to the IPO.

We think at this level, it's relatively safe to at least be involved from a trading perspective. We won't overweight it because they do have the lockup coming.

Analyst ratings and valuation

Despite the selloff, most analysts remain bullish. Of 32 analysts tracked by LSEG, 27 recommend buying, four are neutral, and one, Owen Nicolas of Morningstar, has a sell rating. The average 12-month price target is $235, according to Bloomberg data. Still, the stock's revenue multiple of 49 times dwarfs that of Tesla, highlighting the high expectations baked into the price.

What comes next

SpaceX faces several catalysts that could sway sentiment. The company is scheduled to report quarterly results in the coming weeks, offering a fresh look at its financial trajectory. On the night of July 16 to 17, it plans the 13th test flight of its Starship rocket from Texas, the first to carry operational satellites. A failure could further rattle investors. Meanwhile, a Reuters analysis of 50 major U.S. IPOs since 2010 found that stocks falling below their IPO price within two months tend to underperform, with a median gain of 61% versus 112% for those that stayed above.