SpaceX sheds roughly $700 billion in market value within a week of post-IPO peak

From record peak to a week of losses

Monday's 16.43 percent drop marked SpaceX's third consecutive day of heavy losses, and the stock recovered only about two percent in after-hours trading. The decline pushed SpaceX from its peak ranking to seventh place among the world's most valuable companies, behind firms such as TSMC and Amazon.

Broader AI-exposed names sold off alongside SpaceX. Shares of Alphabet, Google's parent, fell roughly 5 percent, while Amazon dropped 4.8 percent to finish as the worst performer on the Dow. Microsoft shed 3.2 percent, rounding out a synchronised retreat among the largest US technology stocks.

Why investors stepped back

Investors and analysts pointed to several overlapping causes. Matt Maley of the investment firm Miller Tabak attributed the losses to what he called the hyperscalers' extremely low return on capital despite their colossal AI spending. Other market participants cited the very high valuation of the shares and SpaceX's very high capital needs as reasons for the waning post-IPO enthusiasm. The Morningstar analyst Nicolas Owens recently lowered his fair-value estimate for SpaceX, partly because of approximately 3.4 percent dilution tied to a $60 billion stock-funded acquisition of the AI coding startup Cursor/Anysphere.

Concerns about "circular investments" — arrangements in which companies invest in one another while also committing to buy each other's products — added to the cautious mood. The investor Michael Burry, known from the 2008 financial crisis, compared the current wave of major AI IPOs to the dot-com bubble.

Valuation metrics and supply risks

SpaceX's valuation metrics have also drawn scrutiny. The company's price-to-sales ratio sits above 90x, against roughly 3.7x for the S&P 500, and only about four to five percent of SpaceX's outstanding shares are freely tradable — a structure that can amplify swings. Lock-up periods for the stock are scheduled to begin expiring at the end of 2026, which is expected to bring additional supply to the market.

Bond issuance and the road ahead

On the same day as the sell-off, SpaceX announced plans to issue investment-grade bonds for the first time: senior unsecured notes with a volume of at least $20 billion. The proceeds are intended primarily to refinance a bridge loan maturing in September 2027 that originated from the takeover of Musk's AI company xAI. The bond sale is being organized by a banking consortium consisting of Bank of America, Citigroup, Goldman Sachs, JPMorgan and Morgan Stanley.

As of 19 June, SpaceX reported a liquidity buffer of approximately $100.8 billion, a cushion the company is leaning on as analysts at Oppenheimer forecast that its net debt could swell from roughly $13 billion today to more than $400 billion by 2031. Major rating agencies have nonetheless assigned SpaceX investment-grade ratings, with Moody's at Baa1, Fitch at BBB+ and S&P at BBB.

The week's turbulence also stretched into the AI talent market. John Jumper, Vice President of Google DeepMind and a 2024 Nobel Prize in Chemistry laureate for his work in the field of AI, is moving to the competitor Anthropic — a reminder that the capital and personnel flows around artificial intelligence remain in flux even as their equity-market valuations come under pressure.

Taken together, the moves mark a sharp reversal from the euphoria that greeted SpaceX's listing. As one German-language summary of the IPO put it, the company had "den Status des viertwertvollsten Unternehmens der Welt" attained only briefly; the more durable question now is whether the bond sale and upcoming lock-up expirations will stabilize the stock or extend the slide.