Shares of Elon Musk’s SpaceX tech conglomerate experienced a significant decline, dropping 16% on Monday to close below their price on June 12, the day of its initial public offering. This marks the third consecutive trading day of losses for the company, which recently completed the largest IPO in history.
Investor Gains Diminish
At Monday’s closing price of $154.60, average investors who purchased SpaceX shares on the open market after its debut have seen the majority of their gains disappear, according to market data. The stock initially closed at $160.90 on June 12 when trading began on the Nasdaq exchange. It later reached a high of $201.80 per share on June 16.
By the end of Monday’s trading session, SpaceX shares were down approximately 23% from their peak reached a week prior. Despite the sell-off, the company and holders of its previously private shares gained more than $85 billion through the IPO. With a market capitalization of around $2 trillion, SpaceX continues to hold a valuation greater than that of Walmart or Meta, the parent company of Facebook.
Broader Market and Debt Concerns
The downturn in SpaceX’s stock occurred alongside a broader market decline on Monday. Alphabet, the parent company of Google, experienced its worst single-day performance in over a year. The S&P 500 index closed down 0.43%, and the tech-focused Nasdaq fell 1.3%.
Contributing to investor unease were concerns about short-term inflation potentially increasing the debt burden for mega-cap companies that have taken on substantial debt to finance their artificial intelligence infrastructure. News reports indicated that SpaceX was seeking to raise at least $20 billion through a bond sale. This move reportedly spooked investors, who are described as being “wary of the substantial cash required to fund technological ambitions,” according to Jose Torres, a senior economist at Interactive Brokers financial group.
Other consumer-focused stocks also saw significant declines on Monday, including Amazon, Chipotle, McDonald’s, Home Depot, and Netflix.
Norman Pearlstine is the Chief Editor of News Raise and focuses on Business news. His responsibility is to oversee the editorial content including business, commodities, personal investments and the stock market.
