SpaceX falls below IPO price as short sellers book $3.88bn
SpaceX shares have slipped below their debut price, wiping out record market value and leaving high-profile investors like Gina Rinehart sitting on paper losses while short sellers cash in.
SpaceX closed at $131.11 on Thursday, dropping below its $135 debut price as the tech company’s valuation continues to contract. The stock has fallen in seven of the last eight trading sessions, dragging its market capitalisation down from a peak of over $2.6tn to a record low of $1.72tn. Elon Musk’s personal fortune has subsequently slipped to $838bn, according to Forbes.
The rapid deflation has been highly profitable for short sellers, who have booked $3.88bn in gains. The downward momentum accelerated on June 22 when the company announced a multi-billion-dollar bond issuance, spooking traders who had ridden the initial euphoria.
Among the high-profile investors caught in the pullback is Australian mining magnate Gina Rinehart. Her company, Hancock Prospecting, declined to comment on its exact position. However, it has republished articles suggesting it bought over $1bn worth of shares at the IPO, implying Rinehart has lost a $500m paper gain from the stock’s peak and is now sitting on a further $30m paper loss.
Despite the drawdown, there is no indication Hancock is liquidating its stake. Rinehart has previously stated she favours backing industries led by "sensible, hard working, patriotic and exceptional people." She has met Musk personally, said he "excels in every regard," and recently advocated for him to be given free use of north Queensland islands for satellite launches.
Retail investors are now navigating the same volatility. CommSec, Australia’s lead retail broker, received a record 28,000 applications for the stock—four times the demand seen for the largest domestic IPO. Global demand reportedly outstripped supply by a factor of three, meaning many hopeful buyers were shut out entirely.
Tony Sycamore, a market analyst at IG Australia, noted that while some local institutional and retail investors sold early to lock in profits, others remain committed. He attributed the recent sell-off to the inevitable cooling of post-listing hype.
"You’re looking to invest in SpaceX for the long term, you’re backing the man," Sycamore said. "She knows Elon personally. These types of investors... obviously they would prefer to see it still trading at a profit. [But] it is the new frontier of tech stocks... You’re looking to be involved in this stock for a decade."
