The hype surrounding SpaceX's historic stock market debut has given way to a more cautious assessment, with investors scrutinising the company's core revenue streams just one month after its record-breaking IPO. The excitement that propelled its shares from $135 to an intraday high of $225 has been replaced by concerns over the sustainability of its primary business activities: rocket manufacturing and Starlink satellite telecommunications.
At launch, SpaceX set a new benchmark as the largest IPO of all time, with shares priced at $135 per share. The stock surged 19% on its first day to close at $160.95, followed by an intraday high of $225, briefly pushing its market value above that of tech giants Amazon and Microsoft. This initial enthusiasm was driven in part by the perception that SpaceX's acquisition of xAI (now rebranded as SpaceXAI) positioned it as a significant player in the AI sector.
However, attention has since turned to the company's core revenue streams, with investors questioning whether its business model can sustain such high valuations. For instance, when Starlink announced price cuts in the Memphis, Tennessee area due to concerns over a large data centre project, SpaceX shares fell by 8% on that day. By the end of its first trading month, SpaceX shares were trading at approximately $145 each, representing an 18% decline from its first-day high and a 35% drop from its peak.
As retail investors who purchased shares during the initial five days of trading face potential losses, analysts like Keith Snyder from CFRA suggest that those who bought early are now "definitely underwater," drawing parallels to "meme stocks" where prices are driven more by online excitement than underlying business performance. Snyder anticipates a further dip to around $115 per share, which would still value the company at an estimated £1.2 trillion ($1.5 trillion). Samuel Kerr of Mergermarket noted that the impact varies, with initial IPO investors faring better than those who bought into the early surge.
Despite the recent share price fluctuations, Elon Musk has continued to express optimism for SpaceX's future, projecting annual revenues of £750 billion by 2030. The company's addition to the Nasdaq100 index on 7 July saw its shares fall by 4.4%, while earlier inclusion in the FTSE Russell index provided a minor boost.