The Space Exploration Technologies‘ (NASDAQ:SPCX) share price had one of the most dramatic debuts in stock market history. Having gone public at $135 per share on 12 June, the SpaceX price rocketed to a peak of $225.64 in just four days, briefly making Elon Musk’s rocket company the fourth most valuable business on the planet.
But since then, it’s been a very different story. The stock’s collapsed nearly 39% from that peak, and in the last month alone, it’s down close to 30%.
What happened? And is now the time to take advantage?
Why the share price has collapsed
There were several triggers for the sudden decline. The first was SpaceX’s announcement of a $25bn bond offering just 10 days after its IPO. For a company that had just raised $75bn in the largest IPO in history, the immediate return to the debt markets rattled investors and raised fresh questions about just how cash-hungry this business really is.
Then came the Nasdaq 100 inclusion on 7 July. This should have been another positive catalyst, forcing billions of dollars of passive index money into the stock. Instead, shares fell again on the day. Why?
Insiders currently hold a significant chunk of shares that are locked up. That means they currently can’t be sold. But this lock-up period will start to expire alongside the firm’s second quarter results in early August. And as such, institutional investors have already begun selling ahead of this event.
In other words, the market’s starting to bake in expectations of aggressive insider profit-taking ahead of time.
Is there a bull case?
Luckily, the business underneath the noise is genuinely impressive. Starlink crossed 10m active customers earlier this year and generated over $11bn in revenue in 2025, about 61% of total group sales, with total revenue growing by 33% in 2025 to $18.7bn.
Meanwhile, the technology moat of reusable rockets, vertical integration, and global satellite coverage is very real and genuinely formidable. In fact, no competitor comes close to SpaceX’s launch cadence or unit economics.
So is this a buying opportunity? Absolutely not.
Not even with a 10-foot barge pole
It’s hard not to admire SpaceX as a business. But as a stock, it looks like a great way to set my money on fire.
The company isn’t profitable. In fact, it posted a net loss of $4.9bn in 2025 and another $4.3bn in the first quarter of 2026 alone. Even when looking just at the top line, the shares are trading for a price-to-sales ratio of over 90. For reference, the stock market average is around three.
Seeing a high-quality business have a premium valuation is nothing unusual. But in the case of SpaceX, the word ‘premium’ can easily be replaced with the word ‘ludicrous’. And as the analysts at MoffettNathanson put it:
There is simply no credible financial model that can support what is at the time of this writing a roughly $2 trillion valuation.
The bottom line
SpaceX is building extraordinary things. And I could very well be wrong in my pessimism. But at this valuation, the stock’s pricing in a version of the future that requires almost everything to go perfectly. And that’s a big ask, especially for a business operating in the unforgiving realm of outer space.
That’s why I think there are far better investment opportunities to explore elsewhere…
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Zaven Boyrazian does not hold any positions in the companies mentioned.
