SpaceX shares dipped below $135, the opening price set for its June 12 IPO which raised nearly $86 billion.
Stock prices fell to under $133 on Wednesday afternoon before recovering to the initial level and staying there for periods.
The drop followed a general decline since going public. Shares initially climbed past $200, briefly matching the valuation of Amazon and Microsoft. Value has fallen almost every week since that peak.
Volatility stems from the fact that only 4% of total shares trade on the Nasdaq. This small float, combined with constant scrutiny, has caused wild swings during the first month.
Markets also seem less enthusiastic about CEO Elon Musk’s grand vision. This fits a broader cooling in tech stocks over the last month. SpaceX stock has traded down and bonds sold after the IPO are suffering too.
A prolonged downturn could have wider effects. The stock price signals how investors view Musk’s promises about what the company can accomplish. SpaceX’s IPO has set the stage for other big tech companies like Anthropic and OpenAI to go public. Both have filed confidentially for an IPO. While neither has set a date, SpaceX’s stock is being watched to gauge how successful those launches could be.
SpaceX faces another early test of its stock price durability. On Thursday the company will test launch its Starship rocket for the first time since the IPO. Starship is still in development, meaning it is prone to failures under SpaceX’s fly, fail, fix approach.
This is the first Starship flight since a booster failure in May. The company does not plan to recover the booster or upper stage on this flight. Instead, it will simulate a landing in the Gulf of Mexico. Both parts of the Starship system will end in an explosion regardless of whether problems occur during the flight plan.
What it means
Investors watching the IPO of other AI firms will watch SpaceX closely. A crash in the rocket stock could make future public offerings for companies like Anthropic and OpenAI more difficult.
