Musk’s rocket is still flying upward, but SpaceX’s stock price has fallen first.

On Wednesday, July 15, SpaceX’s stock price fell for the fourth consecutive trading day, once falling to around $132 during the session, falling below the IPO price of $135 per share for the first time since its listing. Although it rebounded in late trading and finally closed at $135.27, the issue price, which is regarded as an important psychological line of defense, has been officially broken through.

What is more noteworthy is that this is not an isolated intraday fluctuation. On July 16, SpaceX’s stock price continued to fall, closing at $131.11, officially falling below the issue price at the closing price. Compared with the historical high of US$225.64 set after listing in June, the stock price has fallen by more than 40%, and the company's market value has also evaporated from the high by nearly US$1 trillion.

From "one of the most watched IPOs in history" to falling below the issue price in just over a month after listing, what exactly happened to SpaceX?

The answer may not be that SpaceX's business suddenly stalled, nor that Musk's Mars plan lost its appeal overnight. To be more precise, this round of decline is the result of the combination of emotional premium, extremely high valuation, low circulation structure, technical progress and expectations of lifting the ban in the early stage of listing.

The story of SpaceX is not over, but the market is no longer willing to continue to pay only for the story.

1. IPO is the peak, SpaceX has risen too fast before

SpaceX officially determined its IPO price on June 11, 2026, at US$135 per share, and issued approximately 556 million Class A ordinary shares. It was listed on Nasdaq on June 12 under the code "SPCX". Calculated based on the issuance price, its IPO financing amount reached approximately US$75 billion; after including underwriters' over-allotment and other issuance arrangements, the financing amount calculated by public reports was close to US$86 billion, making it one of the largest IPOs in history.

The market's enthusiasm for SpaceX began almost from the first transaction.

SpaceX’s first transaction price after listing was approximately US$150, which was significantly higher than the issue price of US$135. In the following trading days, the stock price surged all the way, reaching a maximum of $225.64. Calculated based on the highest price, an increase of approximately 67% compared to the issue price, the company's valuation once exceeded US$2.6 trillion, briefly entering a valuation range similar to that of the world's top technology giants.

The problem lies here too.

Under normal circumstances, a company's stock price rise after its listing needs to be supported by revenue growth, profit improvement, increased orders, or the launch of new businesses. But SpaceX went from $135 to $225 in just a few trading days. The company's number of rocket launches did not double in a few days, Starlink users could not increase by tens of millions in a week, and Starship did not suddenly complete full commercialization.

This means that most of the driving force for the rise is not changes in fundamentals, but market sentiment and chip structure.

Investors are snapping up SpaceX not only because it is a commercial aerospace company, but also because it almost brings together several keywords that are most easily imaginable in the current capital market: Musk, rocket reuse, satellite Internet, Mars immigration, artificial intelligence, orbital data centers and global communications infrastructure.

When these concepts appear at the same time on a company that has just gone public and has received a lot of market attention, it is easy for funds to fall into the mood of "if you don't get the car, you will never be able to buy it."

However, all sentiment-driven rises have a common problem: when prices no longer hit new highs, the initial chasing funds will quickly turn into potential selling.

SpaceX has returned from US$225 to around US$135. Essentially, the imagination premium that was quickly pushed up in the early stage of listing is being squeezed out. It's not that the company's value suddenly disappeared by 40%, it's that the market realized that the price paid may have overdrawn many years of growth in advance.

2. The low-circulation market once caused a surge, but now it is also amplifying the decline

One of the biggest price boosters in the early days of SpaceX’s listing was the extremely low circulation price.

According to TechCrunch, the shares that can actually be freely traded on Nasdaq after SpaceX’s listing account for only about 4% of the company’s total share capital. The vast majority of shares held by employees, founding teams and early investors are still locked and cannot be freely sold in the short term.

What does 4% of the circulating supply mean?

Suppose the total value of a company is high, but there are few chips that can be freely bought and sold in the market, then even if only a part of the funds are concentrated to buy, it may push the price very high. SpaceX attracted global attention when it first went public, but it only had a limited stock supply. The relationship between supply and demand was seriously imbalanced, and the stock price was naturally prone to rising sharply.

But low circulation is a double-edged sword.

When it goes up, a small amount of money can push the stock price up quickly; when it goes down, once the buying orders disappear, sellers don't need to sell too many shares, which can significantly lower the price.

Especially after SpaceX stopped rising near $225, short-term funds began to take profits, and some investors pursuing higher prices chose to stop losses. When the market lacks new incremental buying orders at the same time, the price elasticity brought about by low circulation changes from upward to downward.

This is why SpaceX’s volatility after going public far exceeds that of ordinary large technology companies. Although it has a total valuation of more than one trillion US dollars, its current transaction structure is more like a new stock with scarce chips and high attention.

Therefore, SpaceX's rapid decline from $225 does not entirely mean that all shareholders are selling like crazy. What's more likely is that the number of shares actually traded is small to begin with, and changes in marginal buying and selling power are magnified into the valuation of the entire company.

3. Even if it returns to US$135, the valuation is still far from cheap

When many investors see SpaceX falling back to $135, they will naturally have a feeling: Now that it has returned to the issue price, does that mean the price is cheap enough?

But the issue price is not synonymous with "reasonable value".

SpaceX’s full-year revenue in 2025 will be approximately US$18.674 billion, of which Starlink will contribute approximately US$11.4 billion, which is currently the company’s most important source of revenue. At the same time, the company still recorded a net loss of approximately US$4.9 billion in 2025.

Based on a rough calculation of a valuation of approximately US$1.77 trillion corresponding to the issue price of US$135, SpaceX’s market-to-sales ratio is close to 95 times. Even if net losses are not taken into account and measured only by revenue, this valuation level is much higher than that of most mature technology companies, communications companies and traditional aerospace and military companies.

When the stock price reached $225, the valuation became even more exaggerated. At that time, what the market was buying was no longer SpaceX’s current revenue, but a series of successful assumptions for the next ten or even twenty years.

These assumptions include: Starlink users continue to grow rapidly; satellite direct-connect mobile phone services are commercialized on a large scale; Starship achieves complete reuse and high-frequency launches; launch costs continue to drop significantly; SpaceX becomes the core infrastructure for transportation to the moon and Mars; orbital data centers are truly put into operation; and artificial intelligence businesses can generate sufficient revenue and cash flow.

If any of these are successfully realized, it may open up huge market space.

The problem is that the market has priced SpaceX almost based on the optimistic scenario of "most of these goals will be successful," but it has not left much of a safety margin for execution failures, R&D delays, capital expenditure over-budgets, and increased competition.

At present, Wall Street’s views on SpaceX are also clearly divided. Some institutions are still optimistic about the long-term potential of Starlink, commercial aerospace and orbital computing, but some analysts believe that SpaceX has not yet proven that its financial performance can support such a high valuation. CFRA analyst Keith Snyder gave a "sell" rating and a target price of $115. One of the reasons is that the current valuation is highly dependent on long-term growth that has not been realized.

This does not mean that $115 is necessarily a reasonable price for SpaceX, nor does it mean that the bearish view is necessarily correct. But it shows that the market has entered the stage of "calculating the probability of redemption" from "just looking at the imagination" in the early stage of listing.

At $225, investors were concerned about how high SpaceX could fly in the future; after returning to $135, investors began to ask how much more the company would spend in order to fly to that height.

4. Starship is both the core of valuation and the biggest technical risk

If Starlink is SpaceX’s current cash flow engine, then Starship is the engine of SpaceX’s future valuation.

Many of SpaceX’s future grand plans are based on Starship’s ability to achieve large transportation capacity, low cost, complete reuse and high-frequency launch.

The next generation of Starlink satellites are larger in size and weight and require stronger carrying capabilities; lunar missions and Mars transportation require Starship; orbital data centers require thousands of low-cost launches; SpaceX further reduces the price of space transportation and also relies on the success of Starship.

Therefore, the capital market does not just regard Starship as a new rocket, but as the underlying infrastructure of SpaceX’s future business model.

Around July 17, SpaceX originally planned to conduct the 13th Starship flight test. However, after the launch window opened, the system automatically suspended the launch because some Raptor engines failed to start normally. Musk later said the company needed to replace both engines and would try again the following week. The incident further intensified the downward pressure on SpaceX's stock price.

However, the chronological order of events needs to be distinguished.

When SpaceX fell below $135 for the first time on July 15, Starship testing had not yet been suspended. Therefore, the Starship engine problem was not the initial cause of this decline, but a catalyst that further amplified market concerns after valuations and sentiment had already weakened.

For aerospace research and development, it is not uncommon for tests to be aborted or even flights to fail. SpaceX has always adopted a research and development model of rapid testing, discovering problems, modifying the design, and then continuing to fly. From a technical perspective, an aborted test does not mean that the project has failed.

But after going public, the situation changed.

In the past, when SpaceX was a private company, failures in the research and development process were mainly borne by internal investors, and the external market did not reprice it every day. After becoming a listed company, every engine abnormality, every test delay, and every regulatory approval change may be directly reflected in the stock price.

For the first time, the market is using quarterly financial reports and daily quotes to price Musk's long-term aerospace plan in real time.

5. The expectation of lifting the ban and the cooling of technology stocks will allow funds to withdraw early

In addition to valuation and technical risks, SpaceX also faces a more realistic problem: tradable shares may increase significantly in the future.

Only about 4% of the shares are currently circulating in the market, but as the lock-up period gradually ends, some shares held by employees, early investors and other internal shareholders will gradually become eligible for sale.

Different media have different statistics on the specific number of lifted bans. Business Insider mentioned that about 911.5 million shares may be eligible for sale in the near future; MarketWatch reported that as many as 1.37 billion internal shares may enter the potential unlocking window in early August, and more shares may be released within the month. While all of these shares will not be sold immediately, the impact of increased potential supply cannot be ignored relative to the current extremely low float.

The key here is not that insider shareholders will definitely sell off massively, but that the market will trade ahead of the possibility.

Many SpaceX employees and early investors own shares for much less than $135. Even if the stock price falls back from $225 to around the offering price, they could still have substantial gains. For some holders who need to liquidate their assets, pay taxes or adjust their investment portfolio, it is a very normal choice to sell some stocks after the ban is lifted.

When investors expect that the supply of stocks will increase in the future, they often do not wait until the day the ban is lifted to take action, but instead reduce their positions in advance.

At the same time, SpaceX's decline is also related to the decline in risk appetite in the entire technology sector. There has been a significant correction in global technology stocks recently, with chips, artificial intelligence and highly valued growth stocks generally under pressure. Rising interest rates, geopolitical risks, and market doubts about the return on huge capital investments in AI are all driving funds to withdraw from highly valued assets.

Although SpaceX’s main business is aerospace and satellite communications, the market’s pricing approach is closer to that of a super technology platform. When the overall valuation of technology stocks shrinks, it is naturally difficult for SpaceX to survive alone.

Conclusion: SpaceX has not lost its future, but the market is beginning to demand that it deliver on its future

SpaceX fell below the issue price of US$135, which cannot be simply understood as "SpaceX is dead."

From a competitive perspective, SpaceX still has the world's leading rocket reuse capabilities. Starlink has become one of the most important commercial platforms in the satellite Internet field. The company also has strong scale and cost advantages in the commercial launch market.

But an excellent company does not mean that it is an excellent investment at any price.

The biggest problem with SpaceX in the early days of its listing was not that the business had no value, but that the market gave an overly optimistic price in a very short period of time. US$225 represents not only SpaceX’s existing rockets, satellites and users, but also the expectations for the overall success of Starship, the expansion of global communications, the commercialization of orbital computing and even the Mars economy.

When these expectations are factored into the stock price at the same time, any slowdown in progress will bring about a valuation correction.

To judge whether SpaceX’s stock price has truly stabilized in the future, we need to pay attention to at least a few core indicators: whether the first post-listing financial report can prove revenue and cash flow growth; whether Starlink user growth and profitability can continue to improve; whether Starship testing can achieve key breakthroughs; whether capital expenditures continue to expand; and how many shares actually sold by internal shareholders after the ban is lifted.

$135 is psychologically important, but it is not a natural bottom.

The fall of SpaceX back to its issuance price really shows not that the space dream has been shattered, but that the capital market is redrawing the boundaries between dreams and reality.

Before going public, SpaceX only needs to prove that its rocket can fly into space.

After going public, it still needs to prove that the company's profits and cash flow can catch up with the valuation that once soared into the sky.