SpaceX stock slips below $135 IPO price ahead of Starship test flight

SpaceX shares fell below $135 on Wednesday afternoon, dipping beneath the price set for the company’s blockbuster June 12 initial public offering that raised approximately $86 billion. The stock traded as low as $133 before recovering to hover near the IPO price, continuing a steady decline from its post-IPO peak above $200.

Market dynamics behind the decline

The drop reflects a combination of factors, including a broader cooling in tech stocks over the past month. SpaceX’s stock initially surged after going public, briefly giving it a valuation rivaling tech giants like Amazon and Microsoft. Since then, shares have lost value nearly every week.

A key factor contributing to the volatility is the limited float — only about 4% of the company’s total shares are trading on the Nasdaq. This small number of publicly available shares, combined with intense media and investor attention, has created wide price swings since the IPO.

Bonds and broader market impact

The downturn extends beyond equity. Bonds issued by SpaceX in the wake of the IPO are also under pressure, signaling that investor enthusiasm may be tempering. The stock’s performance is being closely watched as a bellwether for other high-profile tech IPOs, including Anthropic and OpenAI, both of which have filed confidentially to go public.

Starship test flight adds uncertainty

SpaceX faces an immediate test of investor confidence on Thursday with the planned launch of its Starship rocket — the first since a booster failure in May. The company’s “fly, fail, fix” approach means the flight carries inherent risk. Notably, SpaceX does not plan to recover either the booster or the upper stage; both are expected to be destroyed during a simulated landing in the Gulf of Mexico, regardless of mission success.

This approach, while consistent with SpaceX’s development philosophy, introduces uncertainty that markets may factor into the stock’s near-term performance.

Why this matters

SpaceX’s stock price has become a proxy for how investors evaluate Elon Musk’s ambitious promises about space travel and colonization. A prolonged downturn could affect not only SpaceX’s ability to raise capital but also the broader IPO pipeline for AI and space companies. The upcoming Starship launch will be an early indicator of whether the stock can stabilize or face further pressure.

Conclusion

SpaceX’s stock has fallen below its IPO price amid broader tech market weakness and ahead of a high-risk Starship test flight. With a small float and intense public scrutiny, the stock remains volatile. Thursday’s launch will test both the rocket and investor sentiment.

FAQs

Q1: Why did SpaceX’s stock drop below its IPO price?
A1: The decline is due to a combination of a broader tech stock selloff, a limited float of only 4% of shares trading publicly, and investor caution ahead of a risky Starship test flight.

Q2: How much did SpaceX raise in its IPO?
A2: SpaceX raised approximately $86 billion in its June 12 IPO, with shares priced at $135.

Q3: What is the significance of the upcoming Starship launch for investors?
A3: The launch is the first since a booster failure in May and follows SpaceX’s high-risk development approach. A failure could further pressure the stock, while success might restore investor confidence.