SpaceX just wiped out over $1 trillion in value: here’s why

SpaceX is on track to lose more than $1 trillion in market capitalisation from its record high, days after the aerospace and artificial intelligence company’s shares fell sharply on Friday.

The stock dropped as much as 6.9% in early US trading to $122.12 a share before recovering some of its losses. At that level, the company’s market value stood at $1.61 trillion, down from its peak of $2.64 trillion reached at the close of June 16, its third trading session, according to a Bloomberg report.

SpaceX, formally named Space Exploration Technologies Corp., had surged after what was billed as the largest initial public offering in history. The stock has since dropped sharply and is now trading below its IPO price of $135.

Friday’s decline followed the company’s decision to abort the launch of its Starship rocket because of an engine-related problem, with SpaceX saying another attempt would be made within the next few days.

Earlier this month, SpaceX was added to the Nasdaq-100 Index and received a series of bullish analyst ratings. The stock currently carries an average 12-month price target of $235.34.

The weakness in SpaceX shares has raised concerns about the broader momentum behind artificial intelligence-related IPOs. AI forms a central part of the company’s IPO narrative as it pursues plans to deploy data centres in space, targeting what it estimates to be a total addressable market worth $26.5 trillion. The record-breaking public offering also gave a major boost to Wall Street’s leading investment banks, which generated their highest revenue from advising on equity offerings in the second quarter since 2021.

Wikimedia Commons/by Steve Jurvetson