Key Points:
- SpaceX shares dropped below their $135 initial public offering price for the first time, closing at $133.80.
- The stock has plummeted more than 40% from its historic peak of $225.64, wiping out over $830 billion in market value.
- Broader tech market sell-offs, interest rate uncertainty, and a small public float of 3% to 5% accelerated the stock’s correction.
- The decline has dragged Elon Musk’s net worth below $900 billion, down from a peak of $1.45 trillion in mid-June.
The historic public market rally of the world’s most highly valued aerospace and artificial intelligence conglomerate has officially unraveled. In a dramatic trading session, SpaceX shares dropped below their initial public offering (IPO) price for the first time, closing at $133.80. This landmark decline marks a major psychological turning point for the newly public stock, sliding below the baseline $135 pricing level and wiping out the spectacular paper wealth accumulated during its blockbuster debut just weeks ago.
The sudden stock fall stands in stark contrast to the unprecedented hype that surrounded the listing in mid-June. The company executed the largest initial public offering in global corporate history, pricing 555.6 million shares at $135 each to raise a record-breaking $75 billion. After the underwriting syndicate fully exercised its over-allotment greenshoe option, the total capital raised climbed to a staggering $85.7 billion, giving the rockets-to-AI giant a market capitalization of $1.77 trillion at debut. Trading initially opened at $150 and finished its first day up 19% at $160.95, making founder Elon Musk the world’s first trillionaire.
A massive wave of speculative retail enthusiasm and mandatory buying from passive index funds quickly pushed the stock to historic heights. On June 16, the share price hit an all-time intraday high of $225.64, briefly pushing the company’s valuation to a staggering $2.67 trillion. At that peak, the aerospace pioneer briefly surpassed the market values of Silicon Valley titans Amazon and Microsoft, ranking as the sixth-largest publicly traded company in the United States. However, the momentum reversed rapidly, with the stock shedding more than $830 billion in market capitalization in less than a month.
This massive market correction has severely impacted the personal wealth of its legendary founder. The persistent slide in the share price cut more than $37 billion from Elon Musk’s net worth in a single week, dragging his total fortune below the $900 billion threshold. While Musk remains the wealthiest person on Earth, directly ahead of tech co-founders Larry Page and Sergey Brin, his current net worth sits far below the historic peak of $1.45 trillion achieved on June 16. Musk holds approximately 4.8 billion shares of the company, alongside 350 million stock options, making his net worth highly sensitive to the stock’s daily movements.
A primary structural driver of this rapid price swing is the company’s extremely tight public float. To maintain absolute corporate control, the board chose to release only a tiny fraction of the company’s 13.1 billion outstanding shares to the public, keeping the freely tradable float at just 3% to 5%. While this limited supply of stock initially amplified the upward rally by creating an artificial scarcity, it has acted as a double-edged sword during the market downturn. When early institutional buyers began taking profits, the lack of market depth caused the share price to drop rapidly on relatively low trading volumes.
The rapid deflation of the stock price also highlights an ongoing debate regarding the company’s underlying financial health. At its peak of $225.64, the stock traded at an astronomical price-to-sales (P/S) ratio of over 100x. Investors are increasingly looking past the optimistic narrative and focusing on the firm’s actual balance sheet metrics. Despite the stellar revenue growth generated by its Starlink satellite communications network, the consolidated group reported a substantial net loss of $4.94 billion in 2025, heavily weighed down by its recent acquisition of the cash-burning artificial intelligence startup xAI.
Market sentiment was also dented by the company’s aggressive, post-IPO financing strategies. Just days after completing its record-breaking equity sale, the firm surprised investors by launching an inaugural $25 billion bond offering consisting of senior unsecured notes. While management plans to use these debt proceeds to fund the massive capital expenditures required for its new AI computing infrastructure and GPU data centers, the sudden addition of billions in high-interest debt onto its balance sheet has made large-scale institutional buyers highly cautious, prompting them to hold off on accumulating more equity.
The stock’s downward trajectory is occurring amid a broader, sector-wide correction across global technology indexes. After a long, tech-led bull run driven by artificial intelligence winners, investors are aggressively rotating out of high-valuation growth stocks and into more defensive sectors. This rotation has been triggered by persistent uncertainty surrounding the Federal Reserve’s interest rate path and fears of a secondary inflation shock caused by surging energy prices. As the market’s narrative premium evaporates, highly priced speculative stocks are experiencing the most severe valuation adjustments.
The persistent selling pressure has completely overshadowed a series of highly positive operational developments. The Federal Aviation Administration recently closed its investigation into the Starship Flight 12 test flight failure, officially clearing the path for the spacecraft’s highly anticipated 13th test flight from Boca Chica, Texas. Additionally, the company is preparing to deploy its first functional commercial payload consisting of 20 third-generation Starlink satellites. However, these technical milestones have failed to revive investor enthusiasm, proving that the stock has entered a fundamental valuation reset.
Ultimately, the slide of the stock price below its IPO baseline represents a sobering reminder of the limits of speculative hype. By trading below its initial $135 offering price, the company has entered a critical confidence test that will challenge its long-term market credibility. As the firm prepares for its inaugural quarterly earnings report on August 6 and the subsequent expiration of insider lockup agreements, its ability to prove that its capital-intensive space and AI ventures can deliver sustainable profits will determine whether the stock can find a solid floor or face further downward corrections.
