• SpaceX shares have fallen below their $135 IPO price as launch delays, valuation concerns, and fading post-IPO excitement weigh on the stock.
  • Limited public float and upcoming insider share unlocks could keep volatility high, while the next Starship test and earnings report may shape the stock’s direction.

SpaceX has had a rough ride on the Nasdaq since its record-breaking public debut.

The rocket and satellite company, led by Elon Musk, has seen its shares fall sharply in recent weeks, raising questions about whether the drop is a temporary bump or a sign of deeper trouble.

A Rocket Launch Gone Wrong

The latest setback came last week in Texas, when SpaceX aborted a planned Starship test flight seconds before liftoff. Several of the booster’s engines failed to ignite during startup, triggering an automatic shutdown on the launchpad. ⁽¹⁾

Musk confirmed the engine failure on social media, adding that two Raptor engines would be removed and replaced. The company has since rescheduled, with the next attempt expected as soon as this week. ⁽²⁾

The stakes are high. This is set to be the first flight of the newer Starship V3 model since the IPO, and it follows a troubled test in May that sent the rocket’s upper stage off course and ended with the booster failing to land properly. Regulators stepped in to investigate before clearing SpaceX to keep flying. ⁽³⁾

Shares Slide Below the IPO Price

SpaceX’s IPO in June was the largest ever, raising tens of billions of dollars and pricing shares at $135.

But the stock has since fallen well below that level, at one point dropping more than 30% from its peak. Even with the decline, the company remains hugely valuable, still worth well over a trillion dollars.

Part of the stock’s volatility comes from its limited float, meaning only a small number of shares are available for public trading. ⁽⁴⁾

SpaceX only sold a small slice of its total shares in the IPO, which made demand exceed supply early on and pushed the price up quickly. Now that early excitement has faded, the stock has come back down to earth. ⁽⁵⁾

Why Early IPO Drops Aren’t Unusual

Falling below an IPO price soon after listing is more common than many investors think. Research shows that many newly listed companies fall below their IPO price within a few years.

That doesn’t necessarily mean the company is a bad investment long-term. Meta, for example, lost more than half its value shortly after its 2012 IPO, only to go on to deliver enormous gains over the following decade. ⁽⁶⁾

Some of the pressure on SpaceX’s stock also comes from selling by insiders and employees who received shares as compensation.

Many are expected to start selling once lockup restrictions ease, particularly after the company’s next earnings report. As more shares become available to trade, that could add further volatility in the months ahead. ⁽⁷⁾

For now, SpaceX remains one of the most closely watched stocks on the market, with its next rocket test and earnings report likely to set the tone for where prices go next.

Sources: ⁽¹⁾ ⁽²⁾ ⁽³⁾ CNBC, ⁽⁴⁾ ⁽⁵⁾ MarketWatch, ⁽⁶⁾ ⁽⁷⁾ Bloomberg