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- SpaceX shares dropped 23%, losing $600 billion market value.
- Investors concerned by borrowing plans and aggressive AI expansion.
- Company eyes $20 billion bond, deepens artificial intelligence involvement.
SpaceX shares extended their decline for a third consecutive session on Monday, wiping out more than $600 billion in market value in just three trading days as investors pulled back from the Elon Musk-led company’s highly anticipated market debut.
The stock dropped 16 per cent to close at $154.60, its lowest level since listing day. The three-day slide has now reached 23 per cent, reducing the company’s market capitalisation to just above $2 trillion. Investors appeared concerned about the company’s planned borrowing programme and its aggressive push into artificial intelligence, which triggered fresh selling pressure, reported NDTV.
Despite the sharp retreat, SpaceX shares remain around 15 per cent above their initial public offering price of $135. The company completed a record $75 billion IPO earlier this month, making it one of the largest public listings in market history.
Sellers Return After Early Buying Frenzy
Market participants suggested that the intense buying seen immediately after the listing may have run its course.
“Sellers are back in control. Anyone in the world who wanted to buy this has bought it already,” Michael O’Rourke, chief market strategist at JonesTrading, said.
The early trading sessions were marked by volatility commonly associated with newly listed companies that have a limited number of shares available for trading. Only 4.2 per cent of SpaceX’s outstanding shares were available to investors when trading began, contributing to significant price swings.
Low Share Float Added To Volatility
The company’s market debut attracted extraordinary interest from retail investors, helping to fuel strong gains during the initial trading sessions.
Even after the recent losses, SpaceX remains the world’s sixth-largest listed company. The stock continues to trade above its IPO price, highlighting the strength of investor interest despite the latest sell-off.
The limited availability of shares, combined with heavy demand, created conditions that often lead to heightened volatility in newly listed companies.
Bond Offering And AI Push Draw Attention
SpaceX is seeking to raise at least $20 billion through its first investment-grade bond sale, according to a Bloomberg report published last week.
The company also announced a multibillion-dollar agreement to provide computing resources to Reflection AI, an artificial intelligence startup. The deal underscores SpaceX’s expanding focus on AI-related businesses.
Its artificial intelligence ambitions accelerated following the acquisition of Musk’s xAI in February. The move placed SpaceX at the centre of growing investor interest in AI companies and increased attention on future public listings by major competitors.
Investors Compare SpaceX With AI Rivals
The listing has become an important test case for other large artificial intelligence firms considering public offerings.
Anthropic and OpenAI are both expected to pursue stock market listings as early as this year, with valuations that could approach $1 trillion.
Investors have closely monitored SpaceX’s market performance as an indication of appetite for large-scale AI and technology offerings.
Retail Investors Remained Active
Retail participation in SpaceX reached levels rarely seen in recent public offerings.
According to Vanda Research, individual investors purchased a net $405 million worth of SpaceX shares during the first five trading sessions. Retail investors bought more SpaceX stock last week than the combined purchases across all Magnificent Seven companies.
Although retail traders remained net buyers on Monday, inflows slowed compared with the previous week, suggesting some moderation in enthusiasm.
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Analysts Say Valuation Already Reflects Growth
KeyBanc Capital Markets initiated coverage of SpaceX with a sector weight recommendation, the first hold-equivalent rating for the stock tracked by Bloomberg.
Analysts led by Michael Leshock said SpaceX remains the dominant player in space launches and related businesses. However, they argued that much of the company’s long-term growth potential may already be reflected in the current share price.
“SpaceX possesses significant disruptive growth avenues, though we believe this is reflected in current valuation and risk/reward appears balanced, in our view,” Leshock wrote.
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