SpaceX Loses $620 Billion in Market Value Days After Retail Buying Frenzy

Key Takeaways

• SpaceX shares have fallen roughly 20% from their post-IPO high, wiping out around $620 billion in market value
• Investors are assessing the impact of SpaceX’s $60 billion all-stock acquisition of Cursor, which will dilute existing shareholders
• The decline comes just days after retail investors poured nearly $370 million into SpaceX stock, making it one of the most heavily bought names on the market

SpaceX stock is discovering that going public is not a bed of roses. Just days after becoming one of the market’s hottest trades, the company has shed more than $600 billion in market value. The decline comes after a notable run. SpaceX shares surged more than 50% above their IPO price earlier this week. It briefly pushed the company’s valuation close to $3 trillion. Retail investors rushed in, betting that Elon Musk’s latest public company could become the next major AI and technology winner.

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The SpaceX Saga: Record Highs to a $620 Billion Decline

By Thursday afternoon, SpaceX shares were trading below $179. This was down about 20% from Tuesday’s high above $225. According to reports, the company’s market value has fallen from nearly $3 trillion to about $2.37 trillion in two trading sessions. Currently, the SPCX stock is priced at $185.

One reason investors have turned more cautious is SpaceX’s planned acquisition of AI coding startup Cursor. The company announced a $60 billion all-stock deal on Tuesday. This would dilute existing shareholders by about 3.4%.

Morningstar responded by lowering its fair value estimate for SpaceX from $63 to $62 per share. They cited the additional shares being issued as part of the transaction.

Others see the deal differently. Oppenheimer analyst Timothy Horan said Cursor could strengthen SpaceX’s AI capabilities and raised his year-end target to $250. He argued that the acquisition gives the company access to valuable technology, engineering talent, and a large user base.

The selloff has also hit Elon Musk’s fortune. Forbes estimates his net worth has dropped by nearly $68 billion since SpaceX reached its recent peak.

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Retail Investors Piled In Before the Decline

The downfall comes after one of the strongest bursts of retail buying seen this year. According to reports, individual investors purchased a net $369.8 million worth of SpaceX stock during its first three trading sessions. NVIDIA attracted just $88.2 million over the same period.

SpaceX wasn’t the only beneficiary of the excitement. The ARK Innovation ETF (ARKK) attracted nearly $7 billion in inflows during June. This marked its strongest month in almost a year.

For now, SpaceX stock remains well above its IPO price. The question is whether investors view this week’s decline as a temporary setback or the beginning of a more realistic assessment of the company’s valuation.

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