SpaceX Stock Plummets 50% to All-Time Low…Is This the Bottom or the Beginning?

▲ SpaceX (SPCX), stock decline / AI generated image ©

SpaceX (SPCX) stock has plummeted by about 50% from its post-IPO high, reaching an all-time low, yet Wall Street is sharply divided on whether further declines or a long-term rebound are ahead.

According to crypto media outlet Watcher.Guru on July 29 (local time), SpaceX stock fell to as low as $108.66 during Monday's trading session before closing at $113.50. This is approximately 50% lower than the post-IPO high of $225.64 recorded in June, and significantly below its IPO price of $135. On Tuesday, it rebounded to $118.13 during intraday trading before closing at $116.41, up $2.91 or 2.56% from the previous trading day.

The sharp decline in stock price continued even after Starship's 13th test flight largely concluded successfully. Starship launched from Starbase in Texas, USA, on Friday evening, deploying all 20 Starlink V3 satellites and completing a stable splashdown, but this did not halt the stock's decline. Dan Huot of SpaceX expressed satisfaction with the test results, calling it “lucky number 13.”

Another factor investors are wary of is the shift in business focus from Falcon 9, the existing core revenue source, to Starship. The market views how quickly Starship can gain reliability as a key variable for future stock price recovery. The analysis suggests that the burden of corporate valuation and large-scale artificial intelligence (AI) investments are increasing short-term volatility more than long-term competitiveness.

Alexander Morris, CEO of F/m Investments, assessed that the stock price could fall into the double digits, and that this is not necessarily a bad thing. He diagnosed that SpaceX has few natural competitors, strong products, enormous entry barriers, and an expanding customer base. Wall Street's 12-month average target price is around $236.71, more than double the current price, but despite the recent sharp decline, major forecasts have not been significantly adjusted.

Mike Zaccardi, an investor at TipRanks, highlighted past cases where large IPO stocks delivered returns to long-term investors after experiencing initial sharp declines. He argued that the lock-up expiry schedule is already largely known to the market and priced in. However, it is still uncertain whether $108.66 is the final bottom or the starting point for further declines, as future earnings announcements, lock-up expiries, and the speed of increasing Starship launch frequency are expected to determine the stock's direction.

*Disclaimer: This article is for investment reference only, and we are not responsible for any investment losses based on it. The content should be interpreted for informational purposes only.*