SpaceX shares continued to decline in premarket trading on June 23, extending a three-day losing streak that has seen the company shed more than $600 billion in market value. This downturn follows the company's second-largest single-session drop on record and places the Elon Musk-led company on track to slip below $2 trillion in market capitalization. The stock fell as much as 5% from its first-day opening price.
The selloff is part of a wider slump in technology stocks, which has dragged Nasdaq 100 futures lower and cascaded across global markets. Investors are showing jitters about high-flying tech stocks and elevated valuations. South Korea's Kospi Index, for instance, plunged 10% from its record high.
A key factor contributing to SpaceX's decline is its announcement that it is seeking to raise approximately $20 billion in investment-grade debt for the first time. This unusual move for a company early in its lifespan has raised concerns among investors about the company's future spending and fiscal sustainability, particularly in the context of the broader tech sector's increasing reliance on debt to fund AI and infrastructure expenses. J.P. Morgan estimates that large hyperscalers have raised about $300 billion in debt since November.
Analysts have noted that the sudden reversal comes just days after a $75 billion initial public offering (IPO) that was reportedly oversubscribed. The post-IPO spike and subsequent drop were also influenced by a supply squeeze from a restricted initial free float. While the debt issuance provides ample leeway for SpaceX's capital-intensive operations, it has spooked equity investors, adding fixed-interest obligations to a company already posting losses. The market capitalization, which briefly exceeded $2.7 trillion, now hovers just above $2 trillion.
Bloomberg's Charlie Wells discussed on "The Pulse with Francine Lacqua" that less than two weeks after its hotly anticipated IPO, investors are questioning the remaining upside for SpaceX, especially with the AI trade stalling and other major offerings from OpenAI and Anthropic looming.
