Space X breaks! Retail investors are under great pressure and the prospect of super-large IPOs has sounded the alarm
[SpaceX breaks! Retail investors are under great pressure, and the prospect of a super-large IPO sounds the alarm] On Wednesday local time, the space exploration company SpaceX broke for the first time in intraday trading. This stress test of market confidence may not only shake the confidence of retail investors, but also put other companies planning to go public into an unfavorable situation.
On Wednesday local time, the space exploration company SpaceX broke for the first time in intraday trading. This stress test of market confidence may not only shake the confidence of retail investors, but also put other companies planning to go public into an unfavorable situation. Overnight (15th), SpaceX's stock price closed down for the fourth consecutive trading day, at $135.27, falling below the IPO price of $135 for the first time in intraday history. This aerospace company just completed a landmark IPO on June 12, raising a record of US$86 billion. The stock price skyrocketed in the early days of listing. At its peak, the company's valuation once exceeded US$2 trillion, making founder Elon Musk the world's first trillionaire. SpaceX also rewrote Wall Street's rules for IPO operations. Although it is temporarily unable to be included in the S&P 500 Index, it has been quickly included in the Nasdaq 100 Index in accordance with the new Nasdaq regulations. Passive funds and ETFs that track the index will passively allocate the stock and bring buying support to the stock price. The sharp drop occurred on the eve of the company's 13th test flight of the Starship, scheduled to take place on Thursday, and only one month after this much-anticipated listing, which is enough to show that the market's investment enthusiasm for the aerospace giant has quickly faded. Since hitting a closing high on June 16, SpaceX's market value has shrunk by about $860 billion, or one-third. Investors are paying close attention to stock price trends as the company is about to announce its first quarterly earnings report and more restricted shares are lifted. On the other hand, global technology stock indexes continue to be under pressure, and market concerns about the overvaluation of technology stocks remain lingering. Matthew Meili, chief market strategist at Miller Tabak, said that once the stock price falls below the issue price, it will have a major blow to market psychology. "The market will form a unified argument: the rise of this stock is purely based on thematic hype and speculative bubbles, with no fundamental support at all." Greg Halter, director of research at Carnegie Capital Advisors, said that retail investors who followed the trend and expected to make a fortune from SpaceX will now be extremely disappointed. He added that the trend of SpaceX will replicate the pattern of all new stocks that have gained popularity in the past 30 years: the average and median returns in the first month of listing are generally negative. It should be noted that it is a common phenomenon for the stock price to fall below the issue price after the listing of new shares. Cerebras Systems, an AI chip company that went public in May, has experienced a breakout; Facebook (now Meta) also experienced a similar deep correction after it went public that year. Ryan Lee, senior vice president of product strategy at financial services provider Direxion, said investors are often overly entangled in IPO pricing and short-term trends in the early stages of listing. "Objectively speaking, SpaceX is still in the new stock price discovery stage." Gabriel Shaheen, CEO of Falcon Wealth Planning, said that even if the issue price drops below US$135 in the short term, the market will clear out normally. Although the process is painful, it is in line with the rules of trading; especially as the share lock-up period of VCs and corporate employees expires, market selling pressure will naturally increase. "A short-term fall below $135 will not change our current position strategy, and we will not panic sell." For subsequent mega-IPOs: warning or accelerating signal? SpaceX's turbulent market has also made it difficult for other companies planning to go public. Some market views believe that the performance of SpaceX will directly affect the subsequent listing windows of large companies. The two AI giants OpenAI and Anthropic are preparing to enter the secondary market. Halter said that companies and investment banks planning to promote large-scale IPOs this year are closely watching the trend of SpaceX: "No company is willing to weaken immediately after listing, or be forced to significantly reduce the issuance valuation." He judged that many companies will directly suspend listing instead of accepting discounted issuance. But Ryan Lee holds a different view: SpaceX’s successful completion of huge fundraising will force AI companies with huge capital needs to speed up the pace of listing. "If I were OpenAI or Anthropic and were in the forefront of a large model arms race and in urgent need of massive capital, I would definitely complete the IPO financing before my opponents."
This IPO will allocate about 20% shares to retail investors. Once the stock price breaks, individual investors will bear a huge impact. China Business News previously reported that Wanda research data showed that within three trading days after listing, domestic retail investors in the United States bought a net US$369.8 million of SpaceX shares. On the first day of the listing of SpaceX shares, Korean overseas retail investors known as "seohak ants" snapped up nearly US$800 million in SpaceX shares. Shaheen warned that a large number of retail investors entered the market with the mentality of "Internet celebrity monster stocks" and invested funds that could not bear losses. Large-scale losses will deepen the negative perception that "the market favors internal institutions." "Investors need to understand that high volatility is normal after the listing of new stocks." However, Maria Leliena, director of financial research at Domini Impact Investments, pointed out that underwriters usually use the green shoe mechanism to protect the market within 30 days before listing; this time SpaceX has an unprecedented scale of fundraising, high market attention, and many heavyweight AI companies are lining up to go public, so investment banks will most likely increase their efforts to maintain stability. “New technology stocks that have not yet achieved profitability and have unclear profit paths are naturally extremely volatile, and falling below the issue price is a common trend for such targets.” (
This IPO will allocate about 20% shares to retail investors. Once the stock price breaks, individual investors will bear a huge impact. China Business News previously reported that Wanda research data showed that within three trading days after listing, domestic retail investors in the United States bought a net US$369.8 million of SpaceX shares. On the first day of the listing of SpaceX shares, Korean overseas retail investors known as "seohak ants" snapped up nearly US$800 million in SpaceX shares. Shaheen warned that a large number of retail investors entered the market with the mentality of "Internet celebrity monster stocks" and invested funds that could not bear losses. Large-scale losses will deepen the negative perception that "the market favors internal institutions." "Investors need to understand that high volatility is normal after the listing of new stocks." However, Maria Leliena, director of financial research at Domini Impact Investments, pointed out that underwriters usually use the green shoe mechanism to protect the market within 30 days before listing; this time SpaceX has an unprecedented scale of fundraising, high market attention, and many heavyweight AI companies are lining up to go public, so investment banks will most likely increase their efforts to maintain stability. “New technology stocks that have not yet achieved profitability and have unclear profit paths are naturally extremely volatile, and falling below the issue price is a common trend for such targets.” (