SpaceX stock (SPCX) closed at a record low of $113.50 on July 27, 2024, wiping out nearly half its value from the post-IPO peak above $225. The tokenized stock, which debuted at $135, has been sliding as investors reassess the company's long-term bets and brace for a wave of new shares to hit the market.
A steep drop from post-IPO highs
After its IPO, SpaceX briefly became one of the most valuable companies in the world, with a market capitalization topping $2.6 trillion. That figure has since shrunk to roughly $1.5 trillion. The initial rally was fueled by speculation and hopes tied to Starlink, reusable rockets, artificial intelligence, and even orbital data centers. But the mood has shifted. Investors are less willing to pay up for projects that may take years to generate returns.
Why the stock is falling
The company lost $4.9 billion last year on revenue of about $19 billion. To fund its expensive technology infrastructure, SpaceX raised $25 billion through the bond market. That debt load, combined with spending on AI, has raised concerns about higher borrowing costs and whether the company can deliver profits soon. Profit-taking by early investors and the unwinding of extremely bullish post-IPO positions have also weighed on the stock. Short sellers have increased their bets against SPCX.
The looming lockup expiry
The first post-IPO lockup period expires on August 6, just two days after the company's earnings report on August 4. That means early investors and eligible employees will be free to sell their shares. The potential supply of new tradable shares is a key worry for the market. The timing of the lockup expiry, coming right after the earnings release, could amplify any negative reaction if the report disappoints.
What to watch on August 4
All eyes are on the upcoming earnings report. Investors want details on revenue trends, the size of the losses, how much is being spent on AI, and how fast Starlink is growing. The report will also provide the first official look at the number of shares that could become available for trading after the lockup ends. With the stock already at a record low, the earnings call could set the direction for the next leg of the move.
