With this fall, SpaceX has wiped out $600 billion in market capitalization over this three-day period, having briefly surpassed Amazon and Microsoft as well during its high-profile listing and subsequent rally to a post-listing high of $225.
Why SpaceX Shares Fell On Monday?
Part of the fall could be attributed to the fact that SpaceX announced the sale of investment-grade bonds for the first time, to fund its Artificial Intelligence (AI) ambitions.
The satellite, rocket and AI conglomerate is looking to raise at least $20 billion from its first bond offering, according to a Bloomberg report. The official amount has not been disclosed yet by the company.
According to Michael O’Rourke, Chief Market Strategist at JonesTrading, anyone who had to buy the stock has already bought it and now the sellers are back in control.
Low Free Float, High Retail Interest
SpaceX still has very little free float in the market as most of the shares are still under a lock-in period. Only 4.2% of the company’s outstanding equity is currently available to trade.
Yet, retail investor interest continues to remain paramount in the stock, despite the recent volatility.
According to insights from Vanda Research, the retail investor cohort net bought SpaceX shares worth $405 million in the first five sessions of it being a public company. That figure is higher than the net buying seen by retail across all Magnificent Seven stocks combined.
Retail remained a buyer in SpaceX even during Monday’s 16% fall, but the inflows were below last week’s levels, according to Vanda.
Is SpaceX A Buy Or Sell?
After receiving two initiations with bullish calls on the day of its listing, SpaceX received another initiation on Monday with KeyBanc Capital Markets giving it a “sector-weight” rating, equivalent to a “neutral” recommendation.
Analysts at the firm wrote that although SpaceX will remain the leader in space-launch and other verticals, but much of the long-term value is already in the price.
Shares of SpaceX, after the 16% fall on Monday are back down to $154.6, just 15% above its IPO price of ₹135 and 31% below their post-listing high of $225.
(With Inputs From Agencies)
