After a blockbuster IPO, which briefly placed Elon Musk’s SpaceX among the world’s top five most valuable companies, things have started fizzling out for the rockets-to-AI firm, as its shares dropped more than 6% on June 18. The stock was last down 3.56% at USD 185.00. However, it was still more than 30% above its USD 135 offering price.
However, SpaceX was not alone, as shares of other US space companies were also down. Rocket Lab and Planet Labs dropped around 3%, while AST SpaceMobile and Intuitive Machines declined around 7% and 3%, respectively.
Retail investors bought up SpaceX shares aggressively for the last three sessions, with a total net purchase of over USD 300 million. On June 18, however, things remained muted, with only USD 9.1 million worth of net purchases noted by 2:00 pm ET (Eastern Time), as per Vanda Research.
Due to its relatively small public float and high valuation, analysts and portfolio managers have been cautioning investors to anticipate volatility early in SpaceX’s life as a public company. The stock’s five-day volume-weighted average price, or VWAP, on June 18, stood at USD 181.71 a share. As a metric, VWAP measures the average price a security has traded throughout the day, weighted by trading volume.
Going by the VWAP, a preferred measure used by traders to gauge investors’ positioning, the average post-IPO buyer is now in a near break-even situation. The decline has reportedly narrowed the profits for thousands of retail investors who gained access to the IPO through brokerage platforms like Robinhood, Fidelity, and SoFi.
“While many individual investors received only a fraction of the shares they requested—in some cases just one or a handful of shares—those allocations were purchased at the USD 135 offering price, leaving them with gains even after the recent pullback. After briefly pushing SpaceX’s market value close to USD 3 trillion, investors have begun reassessing whether the stock’s rapid advance can be justified by fundamentals,” reported CNBC.
Meanwhile, SpaceX, on June 16, announced the acquisition of Anysphere, the startup behind the popular AI coding agent Cursor, for USD 60 billion in stocks to boost its presence in the lucrative enterprise AI tools market.
The rockets-to-AI firm’s bankers are now reportedly preparing to meet investors to discuss a bond offering of at least USD 20 billion, as the company, post its change of status as a newly public entity, seeks funding for an ambitious and capital-intensive AI expansion under which it eyes spending tens of billions of dollars in investment for data centers, computing hardware, and power infrastructure.
The offering would also mark the first time SpaceX is issuing investment-grade dollar bonds. Proceeds from the debt offering would refinance a USD 20 billion bridge loan that SpaceX took out earlier in 2024 after acquiring Musk’s AI startup xAI in February. Bank of America, Citigroup, JPMorgan Chase, Goldman Sachs, and Morgan Stanley provided the bridge financing and are reportedly expected to run the bond offering as well.