SpaceX's share price fell below $140 on July 13, resulting in a staggering $1 trillion drop from its peak market capitalization. The company's market cap, which reached a high of $2.9 trillion shortly after its IPO, has now declined to approximately $1.8 trillion.

The IPO, priced at $135 per share on June 11, raised around $75 billion by selling 555,555,555 shares. Opening at $150 the following day, SpaceX closed its first trading day at $160.95, reflecting a 19% gain. However, the stock continued to rise for only a short period before experiencing a significant downturn.

On June 16, just three days post-IPO, SpaceX shares closed at $201.80 and hit an intraday high of $225.64, bringing the company's valuation close to $2.95 trillion. This brief surge positioned SpaceX ahead of major companies like Amazon and Microsoft. As of now, the company ranks eighth among public companies.

The initial excitement surrounding SpaceX was fueled by ambitious plans for Mars colonization, the promise of nonexistent space data centers, and a $60 billion acquisition of AI startup Cursor, announced on the day of its share price peak. The recent drop to below $140 represents a 38% decline, translating to a $1.1 trillion loss from its intraday peak.

While insiders who purchased shares at the IPO price of $135 are still seeing a slight profit of about 3%, those who bought on the third day of trading are now facing significant losses. The share price is currently 7% lower than its debut on the public market.

Michael Burry, known for his role in the film The Big Short, expressed skepticism over SpaceX's valuation, stating that its S-1 filing did not justify a $1 trillion value, especially given projected 2025 revenues of $18.7 billion against a net loss of $4.9 billion. Morningstar had assessed the fair value at $63 per share at the IPO, considerably less than the initial offering price.

Despite the caution from analysts, the initial enthusiasm for SpaceX drove the stock price higher, only to be met with a dramatic reversal. The stock dropped 16% on June 22, marking its worst trading session since the IPO. Following its anticipated inclusion in the Nasdaq 100 index on July 7, the stock has faced continued challenges in maintaining investor confidence.

This material is for informational purposes only and should not be considered financial advice.