SpaceX shares slide again as the post-IPO rally keeps unwinding

At a glance:

• SpaceX shares fell roughly 18 % from the IPO high of $225.64 on 16 June to around $185 after the Juneteenth weekend.
• Only about 4 % of the company’s shares are freely tradable; the locked‑up majority will begin to release around the first summer earnings and continue into next year.
• SpaceX announced a $60 bn all‑stock purchase of AI coding startup Cursor (Anysphere) on 15 June, diluting existing shareholders and highlighting a growth‑by‑acquisition strategy.

Market reaction after the IPO

SpaceX priced its shares at $135 on 12 June, raising roughly $75 bn in what became the largest stock‑market debut in history. The stock surged 67 % over its first three sessions, touching $225.64 on 16 June before any quarterly results were released. By the close of the following week it had retreated to about $185, erasing most of the post‑IPO euphoria.

The initial rally was fueled by a very thin float—only ~4 % of shares were available for trading—so even modest buying pressure moved the price sharply upward. When sentiment shifted, the same mechanics worked in reverse, and the stock posted a 5 % drop on the Wednesday after the high and a 3.6 % decline on Thursday, marking its first two‑day slide as a public company before the Juneteenth holiday halted trading. This illustrates how limited supply can amplify both gains and losses in the early trading days.

Structural factors driving the swing

Beyond the mechanics of a low float, SpaceX’s dual‑class share structure concentrates voting power: Elon Musk holds roughly 79 % of the votes despite owning about 42 % of the equity, leaving public shareholders with limited influence over corporate decisions. The lock‑up agreement prevents most insiders from selling until after the company’s first summer earnings report, with the full release not expected until well into the next year. This staggered release is designed to avoid a sudden flood of shares that could destabilize the price.

Valuation concerns stem from the company’s fundamentals. Starlink generated $11.4 bn in revenue last year, but average revenue per user fell to $66 per month in Q1 from $86 a year earlier, while the newly added xAI segment carries a $4.9 bn net loss. At the IPO price the implied revenue multiple was around 100×, a level that only makes sense if investors are betting on future growth from Starlink, Starship and the xAI operation rather than on current earnings.

Outlook and key risks

As the lock‑up periods expire, the remaining ~96 % of shares will become tradable, potentially increasing supply and testing whether the stock can sustain its lofty valuation. Analysts warn that once the float expands, the price may react more closely to underlying business performance rather than the speculative momentum that drove the early rally. Investors will be watching for any signs of increased volatility as the insider shares hit the market.

The market now faces a choice: will SpaceX be valued primarily for its Starlink cash‑flow generation, or will it continue to trade on the narrative sold at the $135 IPO price? Commentators such as Gary Black of The Future Fund likened the early trading to a meme stock, while Morningstar had already assigned a fair value far below the IPO level. The coming months will reveal whether the company’s actual earnings trajectory can justify its market capitalization.