SpaceX falls out of orbit: Does anyone still want Musk’s stock?

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SpaceX falls out of orbit

The market quickly cooled on SpaceX

SpaceX shares began falling almost immediately after the company’s high-profile stock market debut. On Wednesday, the stock closed at $148, below its initial trading price of $150 for the second day in a row.

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Demand for SpaceX after the offering was enormous. The company sold shares at $135, raised $85.7 billion including the underwriters’ option, and climbed to a closing price of $201.8 just a few days after trading began on June 16. But that momentum quickly faded: the stock is now more than 25% below its June high.

The problem is that the sell-off did not begin after bad news or a disappointing report. On the contrary, SpaceX got almost everything that would normally support a stock price: the status of the largest IPO, rapid inclusion in the Nasdaq-100, attention from passive funds and a wave of optimistic analyst forecasts. Yet the market still started selling the stock.

Wall Street is selling a bet on the future

While SpaceX shares are falling, major banks continue to convince clients that the company’s stock should be worth much more. After the IPO, Morgan Stanley, JPMorgan Chase, Goldman Sachs, Bernstein, RBC and UBS issued positive forecasts for SpaceX.

According to Bloomberg, analysts’ average price target is about $236 per share. That is roughly 58% above the current level. Morgan Stanley put SpaceX’s potential at $300 per share, Bernstein at $239, RBC at $225 and UBS at $210. Raymond James gave the most aggressive forecast: $800 per share, almost six times the IPO price.

The arguments sound ambitious. SpaceX is being presented not just as a rocket company, but as a future infrastructure platform for a new economy. Analysts point to its leadership in reusable rockets, satellite launches, Starlink, AI services, orbital data centers and new industrial capacity in space.

The Nasdaq-100 was not a safety net

So why are the company’s shares falling? Their rise should at least have been supported by SpaceX’s rapid inclusion in the Nasdaq-100. Usually, joining such an index helps a stock: funds that track the index are forced to buy shares of the new company. In SpaceX’s case, that should have created additional demand.

The same applies to the Russell 1000, which SpaceX joined just two weeks after going public. According to Bloomberg Intelligence, the company’s inclusion in these indexes could have brought at least $5.4 billion in purchases from funds.

But the market reacted differently. Even with that technical demand, the stock failed to stay above its initial trading price. SpaceX received support not only from Musk’s name and Wall Street analysts, but also from passive funds. Yet there were still enough sellers to push the stock lower.

For banks, this story has already been a success. The IPO generated large fees, while high activity around the deal helped trading desks profit from turnover. For funds, buying SpaceX became an obligation. But for ordinary investors, the question remains open: why buy the stock now if the main profit may have gone to those who entered the company before it went public?

Musk asks investors to believe in the impossible again

SpaceX remains one of the most ambitious businesses in the world, and Musk has repeatedly shown that the market can underestimate his projects. But after the IPO, investors are being asked to buy not only rockets, Starlink and future space services. They are being asked to believe that SpaceX can justify a valuation that already requires an almost perfect future.

The stock’s fall below its initial trading price does not mean the SpaceX story is over. But it shows that Musk’s name, a record IPO, Wall Street support and buying by index funds are no longer enough. The market does not want just a beautiful story about space, AI and a new economy. It wants to know who the next buyer of SpaceX stock will be and why that buyer should pay more for it.

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