The glow is off Elon Musk’s SpaceX stock offering as its value crashes back to earth and investors begin to take a closer look at future profitability.
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Musk’s meteoric rise to trillionaire status lasted barely a month. SpaceX’s record-breaking IPO propelled the rocket company to an all-time high of $225 per share, but the stock has been sliced roughly in half.
Musk has shed hundreds of billions in wealth, erasing his trillionaire status. Meanwhile, his electric vehicle company Tesla has hemorrhaged 18 percent of its value in a single week after disappointing earnings reports.
The “honeymoon” with investors is officially over, reports the Washington Post, as close scrutiny of business fundamentals replaced unbridled optimism.
“One of the benefits of being private is that there wasn’t a market to weigh in on and evaluate business decisions,” David Meier, senior investment analyst at Motley Fool, told the Post. “Being publicly traded means everything will be evaluated and information transmitted through market prices. So every SpaceX launch, every Starlink decision and every xAI decision will be scrutinized by the market.”
The scrutiny has revealed uncomfortable truths. After a launch abort caused by engine failures, SpaceX’s stock plummeted.
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“The company is trying to power its data center and exploration bets by using a roughly 400-foot rocket to carry out missions including taking humans back to the moon. But the program has been marred by reliability concerns and repeated explosions. While SpaceX has proved its ability to put satellites and even people into orbit, much of its success has been built off of earlier and less capable launch vehicles,” the Post is reporting.
Noting that SpaceX disclosed losses of at least $13 billion since 2023, raising fundamental questions about profitability, Meier suggested, “One possible explanation is that investors had the time to digest the financials and believe the valuation is too risky,” leading to a “sharp sell-off.”
Tesla’s fall stems from different concerns. Musk has systematically abandoned the automotive business that built Tesla into the world’s most valuable car company, and instead bet on robotics and “physical AI” — specifically his forthcoming Optimus humanoid robot.
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