SpaceX (SPCX) has sunk below its IPO price. It’s going lower.
SpaceX IPO’d on June 12 at $135/share. It shot to $225 in the days after, briefly surpassing Amazon in market cap. A lot of investors piled in chasing that move.
The stock has now fallen nine of the last 10 days. As of this writing, shares are trading around $112/share, below the IPO price and down nearly 45% from the peak.
Last week, SpaceX tried to launch its massive Starship rocket, its first test since going public. Some of the engines failed to ignite, triggering an automatic abort. Elon Musk said they’ll replace the engines and try again soon. This kind of setback happens all the time when testing rockets.
For SpaceX in particular, the valuation was and is also a concern. What more… not a single insider has sold a penny of SpaceX stock yet. And in early August, 911 million shares are set to unlock. That means many employees, early investors, and insiders who’ve been unable to sell will finally be able to. That’s a lot of potential supply hitting the market at once.
If you didn’t buy yet: Good. Patience should continue to pay off here. We could see SpaceX at sub $100—maybe as low as $60 to $70—before it carves out its ultimate bottom.
Normally I do not see any financial logic into Elon’s companies so been in and out few times and took profits. But this time with SPCX, I am going to do something different, so took a small position. But I still see the price is high for now and as all IPOs do perform, we shall get an opportunity at lower levels and then is the time to add. So don’t buy yet.
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