SpaceX Stock Drops 16% In 3rd Day of Decline, Now Below IPO

Welcome back to 'the glorious days of yesteryear,' when stocks shot up like rockets, then quickly descended to the level reflected in their financials - assuming they had such a thing. 

What has happened to SpaceX over the past week will be familiar to anyone who endured - or read about - the dotcom boom, when companies with no real business but with .net in their title could go public on a story and a prayer. Or, as some used to say, 'buy the story, sell the news.' The reality is that projected sales and profits never supported SpaceX's hyped up valuation, which is now below a 'mere' $2 trillion. Reversion to the mean comes for us all and, in SpaceX's case, is now getting - somewhat - closer to actual potential. JL

William Gavin reports in Marketwatch and Alexander Osipovich reports in the Wall Street Journal:

Elon Musk’s company is falling ahead of the opening bell, putting its market cap on track to fall below $2 trillion for the first time since its blockbuster IPO. SpaceX shares are down more than 4% premarket, to about $148—below the $150 level where they began trading on June 12. Yesterday, SpaceX shares just had their worst day yet — carrying them below their closing price from their first day of trading less than two weeks ago. The stock finished Monday’s session at $154.60, with declines escalating toward the end of the trading day. SpaceX shares closed well below the $160.95 at the finish on June 12, when the company went public. That means that anyone who bought the stock after its first day of trading has lost money — at least on paper. 

Elon Musk’s rocket company is falling ahead of the opening bell, putting its market cap on track to fall below $2 trillion for the first time since its blockbuster IPO.

SpaceX shares are down more than 4% premarket, to about $148—below the $150 level where they began trading on June 12.

 

Yesterday, SpaceX shares just had their worst day yet — carrying them below their closing price from their first day of trading less than two weeks ago.

The stock 

SPCX

-16.43%

 finished Monday’s session at $154.60, with declines escalating toward the end of the trading day.

SpaceX shares closed well below the $160.95 level sustained at the finish on June 12, when the company went public. That means that anyone who bought the stock after its first day of trading has lost money — at least on paper. 

The heavy selling pressure has taken a toll on SpaceX’s valuation. The company finished with a $2.04 trillion market capitalization at Monday’s close, just behind Taiwan Semiconductor Manufacturing’s 

TSM

+1.20%

 $2.06 trillion, according to Dow Jones Market Data. As such, SpaceX slipped to No. 7 in the ranks of the world’s largest companies.

SpaceX erased $400.8 billion from its market cap on Monday, which made for the second-largest one-day wipeout on record for any U.S. company, according to Dow Jones Market Data.

The company on Monday confirmed plans to offer senior unsecured notes to raise cash and help pay off its existing debt. The proceeds of that raise would go toward a $20 billion bridge loan, which SpaceX originally took out to pay off debt accrued by CEO Elon Musk’s xAI.

That offering comes despite SpaceX confirming on Monday that it has $100.8 billion in cash and cash equivalents. Most of that comes from the more than $85 billion it raised through its initial public offering.

It also has a new deal to provide compute to Reflection AI, a startup developing open-source artificial-intelligence models, through the end of 2029. The deal will give SpaceX $150 million per month in revenue beginning in July, according to the Wall Street Journal. Like SpaceX’s other AI-compute deals, it could be ended with 90 days’ notice after the first three months