SpaceX drops below $135 IPO price as lockup looms

SpaceX shares fell 2% to $133.34 on Wednesday, marking a fourth consecutive decline and pushing the stock below its $135 initial public offering price for the first time. The rocket company raised roughly $85.7 billion in its IPO, with early trading pushing its valuation to about $2.1 trillion. The recent slide leaves investors who bought at the offering price sitting on paper losses, a sharp reversal from the all-time high of $225.64 reached shortly after listing.

The stock's trajectory has been exceptionally volatile. After surging nearly 50% during its first three days on the market, SpaceX has surrendered roughly a quarter of its value over the subsequent three sessions. Much of that initial demand appears to have been mechanical rather than fundamental.

A Nasdaq rule change allowed the company to join the Nasdaq 100 in July after just 15 trading days, down from the previous three-month requirement. SpaceX also entered the Russell 1000 in late June. These inclusions forced passive index-tracking funds to accumulate shares, artificially inflating the price before that buying pressure dissipated.

Investors are now looking ahead to a catalyst that could extend the sell-off. The first of multiple lockup periods is scheduled to expire after SpaceX posts its first quarterly earnings report. If early backers use the expiration as an opportunity to cash out, the sudden increase in floating supply could drive the stock lower.

The correction highlights the difficulty of justifying SpaceX's premium. The company has yet to achieve profitability, and its ambitious long-term projects remain untested. As Reuters reported, several analysts had warned ahead of the IPO that the initial euphoria would fade, creating better entry points for fundamental investors.

Macroeconomic headwinds are compounding the company-specific pressure. Broader equities have struggled as markets debate when the Federal Reserve will cut interest rates. Simultaneously, investors are questioning whether the AI-fueled market rally led by chipmakers can maintain its momentum.

Wall Street banks, however, have maintained their optimistic stance following the end of the mandatory quiet period. Raymond James established a Street-high price target of $800. Overall, more than 80% of analysts tracked by Bloomberg rate the shares a buy, with an average price target of approximately $238. That figure represents a 78% premium over the current price, setting up a stark test between near-term technical pressures and long-term institutional expectations.