SpaceX falls more than 6% as the record IPO rally cools

For two days, SpaceX was one of the five most valuable companies on Earth. On Thursday, the market began to reconsider. Shares in Elon Musk’s rocket-and-satellite company fell more than 6%, last trading down 6.5% at $178.50, as the frenzy that followed the largest initial public offering in history started to cool.

The drop was steep but the altitude remained high. Even after Thursday’s fall, the stock sat more than 30% above its $135 offering price, the level at which SpaceX priced the IPO that raised $75bn.

The shares had soared in their first two sessions, briefly carrying SpaceX’s market capitalisation past Amazon and, for a moment, Microsoft, before investors began asking whether the valuation could hold.

At around $2.52 trillion, the company’s market value would shrink by more than $150bn on Thursday alone if the losses held into the close. Numbers of that size move with the broader narrative as much as with any single data point, and the narrative this week shifted from triumph to scrutiny.

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The question hanging over the stock is the one that hangs over most richly valued listings: what, exactly, justifies the price.

Analysts framed the slide as ordinary rather than ominous. “Given the magnitude of the IPO and the strong initial performance, some degree of profit-taking is not surprising,” said Kat Liu of IPOX Schuster, noting that it had been “a particularly eventful and shortened trading week for the largest IPO in history.”

Profit-taking after a debut this large is less a verdict than a settling, early holders booking gains while the rest of the market decides what the company is worth.

What it is worth depends heavily on two things, one orbital and one terrestrial. Starlink, the satellite-internet division, is the only consistently profitable part of the business and the engine behind most of the bullish valuation cases.

The other factor is Musk himself, whose ownership and control are unusually concentrated; the company’s IPO filing confirmed that he and insiders retain dominant voting power regardless of the public float.

The costs sit on the other side of the ledger. SpaceX is pouring money into an expensive AI push and into Starship, the next-generation vehicle whose development has been anything but smooth; the company launched Starship V3 weeks before the listing and watched the booster explode.

Investors weighing a multitrillion-dollar valuation are weighing those programmes too, and the spending they imply against the revenue that has to follow.

The IPO has already made Musk, on paper, the world’s first trillionaire, a milestone that itself drew scrutiny over how the wealth was created and who absorbed the risk. Thursday’s move is a reminder that paper wealth at this scale fluctuates by the hundreds of billions on an ordinary trading day.

The week also revived a structural question about the listing itself. SpaceX is unusual among mega-cap debutants in that the public float represents a sliver of the company while Musk keeps the controlling votes, an arrangement that concentrates both the upside and the decision-making in one person.

For index funds and retail buyers who piled in, the practical effect is exposure to a company whose direction they cannot influence, at a valuation that assumes years of flawless execution across rockets, satellites, and AI.

There is a reflexive quality to a stock like this. Much of SpaceX’s value rests on expectations about Starlink’s growth and Starship’s eventual success, neither of which is settled, and a falling share price can itself dent the confidence those expectations depend on.

A 6% slide on a quiet Thursday is not a crisis, but it is a reminder that valuations built on narrative move when the narrative does, in both directions.

None of the week’s drama changes the fundamentals yet; the company has not reported as a public entity for a full quarter, and the first earnings call will be the real test of the valuation. For now, the post-IPO frenzy has lost some steam, and the market is doing what it always eventually does with a record-setting debut: pricing it.