SpaceX stocks fell to an all-time low of $123.99 on the 17th, dropping over 5% and closing below the IPO price of $135 for the first time since listing one month ago. According to the Financial Times on the 18th (local time), the decline represents a 40% drop from the intraday peak of $225 recorded in mid-last month. The stock's collapse comes as short sellers accumulated positions representing 30% of tradable shares, generating an estimated $4 billion in profits over one month, according to financial data firm S3 Partners. The pressure intensifies ahead of next month's lock-up expiration, which will release 900 million additional shares into the market. The decline reflects a broader correction in high-valuation technology stocks, with US semiconductor stocks recording their worst week since last year's "Liberation Day" market crash on the previous day.
SpaceX Stocks Fall to $123.99 All-Time Low
SpaceX stocks closed at $123.99 on the 17th, marking a new all-time low. The stock first crossed below the IPO price of $135 during trading on the 15th. The company raised $86 billion in its IPO last month, with its valuation approaching $2 trillion at the peak.
Short Sellers Control 30% of Tradable Shares
Short sellers gained an estimated $4 billion in profits over the past month, according to S3 Partners. Approximately 30% of the 640 million tradable SpaceX shares are currently borrowed for short selling purposes. This percentage increased by 10 percentage points over ten days. Dek Mullarkey, managing director at SLC Management, stated that "investors' enthusiasm for SpaceX appears to have cooled" and that the company's stocks and bonds are "suddenly being priced to reflect greater risk." SpaceX did not respond to the Financial Times' request for comment.
Lock-Up Expiration to Release 900 Million Shares Next Month
900 million shares will become available for trading next month when the lock-up period for pre-IPO investors expires. Market participants explain that investors are exiting positions in anticipation of insufficient demand to absorb this supply. A chief investment officer at a North American small hedge fund stated: "With more supply coming next month, even if SpaceX announced it conquered the moon and found gold inside, there wouldn't be money in the market to buy this stock." The fund earned $20 million from short selling SpaceX earlier this month.
Bond Yields Rise to 7.4% as CDS Market Emerges
SpaceX issued $25 billion in corporate bonds at the end of last month, shortly after receiving investment-grade ratings from major credit rating agencies. The 30-year bond yield rose from 6.7% at issuance to 7.4%, approaching levels typical of speculative-grade companies. Bond prices fell to 91% of face value during the same period. A credit default swap (CDS) market for SpaceX debt emerged at the end of last month. According to Bloomberg, SpaceX CDS pricing reached 158bp (1bp = 0.01 percentage points). This means paying $158,000 annually to insure $10 million worth of bonds against default for five years. The price increased from $110,000 at the end of last month.
FAQ
What happened to SpaceX stocks on the 17th?
SpaceX stocks fell over 5% to close at $123.99 on the 17th, marking an all-time low and falling below the IPO price of $135. The stock had first crossed below the IPO price during trading on the 15th.
How much did short sellers profit from SpaceX stock decline?
Short sellers gained an estimated $4 billion in profits over one month, according to S3 Partners. Approximately 30% of the 640 million tradable SpaceX shares are currently borrowed for short selling, with this percentage increasing by 10 percentage points over ten days.
What will happen to SpaceX shares next month?
900 million additional shares will become available for trading next month when the lock-up period for pre-IPO investors expires.
