SpaceX shares fall after Starship test flight abort

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SpaceX Starship test aborted

Highlights

SpaceX aborts the first Starship V3 test flight minutes after launch window opens due to engine startup failure, following recent FAA clearance.
FAA's final report on the May test identifies heat damage and erroneous engine alarm settings as key causes of Super Heavy booster loss; SpaceX implements four corrective actions.
SpaceX shares drop over 3% in extended trading to $131.11, continuing a five-day losing streak and falling further below the $135 IPO price after raising $85.7 billion in the record IPO.

Launch halt follows recent FAA clearance

As reported by CNBC, SpaceX stands down from Thursday's Starship launch attempt within minutes of the opening of a 90-minute window at 6:45 p.m. ET, after an automatic abort stops the mission. Elon Musk says on X that some of the engines do not start, triggering the abort, while a SpaceX employee says on the livestream that the booster shuts down its engines as they begin to ignite.

The mission is set to be the first test flight of Starship V3, an upgraded version of the company's roughly 400-foot-tall rocket, since SpaceX's initial public offering last month. The Federal Aviation Administration clears Starship to fly again on Monday after ordering an investigation into the previous May test, when several bottom-stage engines fail to reignite for a soft landing and the booster falls into the Gulf of Mexico.

In a statement, the FAA says the final mishap report identifies the two most probable root causes of the Super Heavy booster loss as heat effects on propulsion system components during ascent and erroneous engine alarm system settings. The agency also says SpaceX identifies four corrective actions, including hardware and software updates, to prevent a repeat of the event.

Starship delay weighs on newly listed shares

Investors are closely watching the 13th Starship test flight because the rocket is key to SpaceX plans to expand its Starlink satellite internet business and complete Artemis test flights with NASA for the U.S. space agency's next moon landing. As part of Thursday's mission, Starship plans to carry 20 next-generation Starlink satellites designed to deploy solar arrays and antennas, connect with the wider constellation, and then burn up on reentry about 20 minutes after deployment.

SpaceX shares fall more than 3% in extended trading and continue a five-day losing streak, moving further below their $135 IPO price. The stock also slides more than 3% to close at $131.11 on Thursday, after volatile trading since the listing, while the company raises $85.7 billion in the IPO, including the underwriters' option, in what the report describes as the largest IPO on record.

In our previous coverage of the tech-led sell-off in U.S. equities, we noted that investors were pulling back from chipmakers and other AI-linked growth stocks as concerns grew over stretched valuations and leveraged positioning. We also highlighted how SpaceX shares, fresh off the company’s record IPO, started to retreat amid broader risk-off sentiment tied to inflation worries and rising oil prices.

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