SpaceX's shares have fallen roughly a third from their peak, reminding investors that even high-profile listings with compelling stories can deliver steep losses when optimism meets reality.
SpaceX's share price has fallen sharply from its IPO listing price, offering a case study in how hype, narrow public floats, and ambitious long-term assumptions can drive valuations that leave little room for disappointment.
The shares traded above US$200 shortly after the June 2026 listing — the largest IPO in history at roughly US$2 trillion — but have since fallen to around US$135, dipping below the IPO price at times. The decline has wiped nearly US$1 trillion from the company's market value and cost founder Elon Musk his US trillionaire status, according to RNZ.
New Zealand investors gained exposure through platforms such as Sharesies, which described SpaceX as a consistently popular choice among its users since the IPO, according to RNZ.
Why the price fell
AUT professor of finance Aaron Gilbert said SpaceX was a textbook example of a company that attracts significant hype. "It has an exciting story, enormous potential, and a wide divergence in opinion, with many investors extremely optimistic about its future."
A key structural factor was the extremely small public float at listing — only around 5 percent of the company's shares were publicly traded. Gilbert said that meant optimistic investors could have an outsized influence on the opening price. "Over time, as the shareholder base broadens, investors with more cautious views begin to have greater influence on pricing, so it is not unusual to see some of that initial enthusiasm unwind."
At US$200 per share, investors were effectively pricing in a vast array of future outcomes becoming reality simultaneously: Starship becoming commercially viable, Starlink achieving global satellite internet dominance, and newer ventures such as floating AI data centres generating substantial profits.
"The economic backdrop is also becoming less favourable, with the possibility of higher interest rates increasing investors' required returns," Gilbert said. "Because so much of SpaceX's value depends on cash flows that are many years into the future, even relatively small changes in expectations about growth, profitability or interest rates can have a large impact on today's share price."
Forsyth Barr senior equities analyst Aaron Ibbotson said AI sentiment had generally weakened, taking some of the shine off momentum stocks. "SpaceX is one of those proper FOMO stocks, and if there is no missing out, then the fear subsides. Proper momentum stock. It goes up because it goes up and then down because it goes down. Stocks with limited connection to fundamentals move on sentiment."
Kernel founder Dean Anderson noted that much of the IPO excitement was structural rather than fundamental. "The IPO process involves suspense and the build-up to the moment and there's a lot of sales activity going on. We saw that with SpaceX, where everybody wanted a piece of this thing. There was a lot of curiosity around is it going to be included in the indices? What does that mean? And there was a relatively small portion of capital being raised so the expectation was that there's a bit of a fight over who's going to get a share of that small amount of equity that becomes available."
He said the valuation at IPO was based on "fairly lofty" long-term assumptions. "It doesn't mean it won't achieve them over the long term, but a lot of that is already baked into the assumption at the price that it came to market."
What comes next
The next significant catalyst will be SpaceX's first quarterly earnings report. Until then, investors have little new information beyond secondary market sentiment. "The next big moment is going to be when it releases its first set of quarterly reports," Anderson said. "For now there's no new information available. People are going to be having a close eye on how well is Starlink going? What does the pathway look like for X? How much is being spent on AI infrastructure?"
Gilbert noted that even after the pullback, SpaceX was not obviously cheap by conventional metrics. "Investors make money by buying businesses for less than they are ultimately worth, and companies that trade on very high valuation multiples — whether measured by price-to-sales or other metrics — leave much less room for disappointment."
This article is for general information only and is not personalised financial advice. Seek advice from a licensed financial adviser (registered on the FSPR) for guidance specific to your situation.