SpaceX drops 6% as record IPO rally loses momentum

For two days, Elon Musk’s SpaceX held its ground among the five most valuable companies on the planet. By Thursday, the market had second thoughts. Shares in the rocket-and-satellite giant dropped more than 6%, last trading down 6.5% at $178.50, as the euphoria surrounding the largest initial public offering in history began to fade.

The decline was steep, but the stock still floated high. Even after Thursday’s pullback, shares remained more than 30% above the $135 offering price, the level at which SpaceX raised a staggering $75 billion in its IPO. The stock had surged in its first two sessions, briefly lifting the company’s market capitalisation past Amazon and, for a fleeting moment, Microsoft, before investors started questioning whether such a valuation could hold.

At roughly $2.52 trillion, SpaceX’s market value stood to lose more than $150 billion on Thursday alone if the losses held through the close. Numbers of that magnitude move with the broader narrative as much as with any single data point, and this week that narrative shifted from triumph to scrutiny.

The core question hanging over the stock is the same one that dogs most richly valued listings: what exactly justifies the price? Analysts framed the slide as routine rather than alarming. “Given the magnitude of the IPO and the strong initial performance, some degree of profit-taking is not surprising,” said Kat Liu of IPOX Schuster. She noted it had been “a particularly eventful and shortened trading week for the largest IPO in history.” Profit-taking after such a massive debut is less a verdict than a settling, as early holders cash in while the broader market decides what the company is truly worth.

What SpaceX is worth depends heavily on two factors, one orbital and one terrestrial. Starlink, the satellite-internet division, remains the only consistently profitable part of the business and the engine behind most bullish valuation cases. The other factor is Musk himself, whose ownership and control are unusually concentrated. The IPO filing confirmed that he and insiders retain dominant voting power regardless of the public float.

On the other side of the ledger sit the costs. SpaceX is pouring money into an expensive AI push and into Starship, the next-generation vehicle whose development has been anything but smooth. The company launched Starship V3 weeks before the listing and watched the booster explode. Investors weighing a multitrillion-dollar valuation are weighing those programmes too, along with the spending they imply against the revenue that must follow.

The IPO has already made Musk, on paper, the world’s first trillionaire, a milestone that drew scrutiny over how the wealth was created and who absorbed the risk. Thursday’s move is a reminder that paper wealth at this scale fluctuates by the hundreds of billions on an ordinary trading day. The week also revived a structural question about the listing itself. SpaceX is unusual among mega-cap debutants in that the public float represents a sliver of the company while Musk keeps the controlling votes. This arrangement concentrates both the upside and the decision-making in one person. For index funds and retail buyers who piled in, the practical effect is exposure to a company whose direction they cannot influence, at a valuation that assumes years of flawless execution across rockets, satellites, and AI.

There is a reflexive quality to a stock like this. Much of SpaceX’s value rests on expectations about Starlink’s growth and Starship’s eventual success, neither of which is settled. A falling share price can itself dent the confidence those expectations depend on. A 6% slide on a quiet Thursday is not a crisis, but it is a reminder that valuations built on narrative move when the narrative does, in both directions.

None of the week’s drama changes the fundamentals yet. The company has not reported as a public entity for a full quarter, and the first earnings call will be the real test of the valuation. For now, the post-IPO frenzy has lost some steam, and the market is doing what it always eventually does with a record-setting debut: pricing it.