SpaceX's share price has fallen below its initial public offering (IPO) price of $135, closing at $132.62 on Wednesday. The stock has dropped 41% from its post-float peak, marking a sharp reversal from the investor frenzy that followed its debut just over a month ago.
A steep decline for a high-profile stock
The decline comes amid a turbulent period for tech stocks, but SpaceX has been hit particularly hard. While the broader Nasdaq index fell just 0.2% on Wednesday, SpaceX shares dropped more than 2%. The stock has been volatile since its listing, initially surging as investors treated it as a rare opportunity to invest in an AI company, according to analysts.
AI acquisition and business challenges
Earlier this year, SpaceX acquired Elon Musk's AI startup xAI, now renamed SpaceXAI, which leases data center capacity to other tech companies. However, the company's core business remains rocket manufacturing and Starlink satellite communications. A recent price cut by Starlink in Memphis, Tennessee, amid local concerns over a data center project, sent SpaceX shares down 8%.
Investor sentiment and outlook
Steve Sosnick, chief market analyst at Interactive Brokers, noted that there have been no recent catalysts to sustain investor enthusiasm. SpaceX is expected to release its first public earnings report in August. While Sosnick said the dip below the IPO price is not a tragedy, he emphasized that SpaceX is heavily watched and holds an important place in investor psychology. The company did not immediately respond to a request for comment.