SpaceX falls below $135 IPO price for the first time, down 41% from peak, as Starship test looms

From frenzy to floor

SpaceX shares (SPCX.O) fell below their $135 IPO price on Wednesday, closing a chapter on the blistering rally that followed the company's record-setting market debut on June 12. The stock traded as low as $132.62 before recovering to hover near $135 in afternoon trading. The decline caps a steady slide from an all-time high of $225.64 reached in the days after the listing, a drop of roughly 41 percent. The IPO raised approximately $85.7 billion and briefly valued the rockets-to-AI company above $2 trillion, surpassing Silicon Valley stalwarts Microsoft and Amazon.

It raises the narrative that the stock is up on fluff, on speculation, on froth, and not on real fundamentals.

Wealth and market impact

The retreat has erased roughly $800 billion in market value in one month, according to Adnkronos. Elon Musk, who became the world's first trillionaire during the post-IPO surge, saw his stake fall to around $760 billion from $1.2 trillion at the peak. The Bloomberg Billionaires Index placed his wealth at $861 billion on Tuesday. Bonds SpaceX sold in late June also came under selling pressure. The broader tech market has sagged in recent weeks, dragged by uncertainty around the Federal Reserve's rate path and doubts about the durability of the AI-driven rally.

Investors who bought into the excitement around SpaceX's listing, hoping to 'make a killing' will be disappointed.

A narrow float and price discovery

Just 4 percent of SpaceX's total shares are trading on the Nasdaq, creating a small float that has amplified volatility during the first month of trading. The stock's inclusion in the tech-heavy Nasdaq 100 index in early July did little to reignite buying; shares have dropped nearly 13 percent since joining the index. Analysts described the move below $135 as a normal, albeit painful, price discovery process for a newly public company. Meta and Cerebras Systems experienced similar post-IPO dips. Gabriel Shahin, CEO at Falcon Wealth Planning, said a near-term break below the threshold would not alter his firm's positioning.

The reality is, (SpaceX) is still undergoing some of this price discovery process.

The Starship test ahead

The stock faces another early test on Thursday when SpaceX attempts a Starship launch for the first time since its IPO. The flight will be the first since a booster failure in May, and the company does not plan to recover the booster or upper stage; both will simulate a landing in the Gulf of Mexico and end in an explosion regardless of the flight plan. Starship remains in development under SpaceX's "fly, fail, fix" approach, and failures are common at this stage.

Wider IPO implications

A prolonged downturn in SpaceX shares could ripple beyond the company itself. Anthropic and OpenAI have both filed confidentially for initial public offerings, and their potential valuations are being benchmarked against SpaceX's post-IPO performance. In its prospectus, SpaceX estimated the future total addressable market for artificial intelligence, including infrastructure, at more than $26 trillion, citing that figure as justification for its high valuation. The company reported a loss of roughly $4.94 billion on revenue of $18.67 billion last year. SpaceX has not yet announced a date for its first post-listing earnings report, but said results will be released only through its website and its X social media account.