SpaceX shares have dropped to $136.08, just $1 above their initial public offering (IPO) price of $135, following a 2.2% decline on Tuesday. This recent downturn has erased nearly $850 billion in value from the company's post-listing peak, which saw its valuation soar past $2 trillion. The stock has plunged one-third from its high, raising concerns about its market performance just weeks after its debut on June 12.
Analysts have largely remained bullish on SpaceX, with over 80% recommending a "buy" rating and an average price target of $236.25, more than 70% above Tuesday's close. Firms like BofA Securities, Morgan Stanley, JPMorgan Chase & Co., and Goldman Sachs Group Inc. initiated coverage with positive ratings. Despite this, skepticism exists, particularly regarding the company's high forward estimated price-to-sales ratio, which at over 30 times, is among the highest in the Nasdaq-100 Index. Additionally, an extended lock-up period is expected to see insiders release shares into the market, potentially adding continuous supply and further downward pressure.
The decline below the IPO price, while not uncommon for newly public stocks (with studies showing an average maximum decline of 55% in the first year for major tech IPOs), is viewed as a "psychological blow." This situation could test investor confidence, particularly among retail investors who received about 20% of the allocation. Experts like Ken Mahoney of Mahoney Asset Management believe SpaceX may not have found its low yet, expecting continuous supply to enter the market. Conversely, some, like Talley Leger of the Wealth Consulting Group, see a potential dip below the IPO price as an opportunity for "dip buying" by investors who missed the initial share sale.
