SpaceX stock sank Monday. The shares have lost some magic after the company’s mega IPO as investors digest news of a new bond offering.
SpaceX said Monday that it would issue its first investment-grade dollar bonds. The company is raising an unspecified amount to repay outstanding borrowings under its bridge loan facility. SpaceX noted alongside the bond announcement that as of June 19, it held approximately $100.8 billion in cash and cash equivalents. SpaceX raised more than $85 billion in its IPO.
The news of the bond offering appeared to weigh on SpaceX. The stock closed at $154.60, down 16.4% for the day, while the S&P 500 was off 0.4%. It’s a third consecutive loss for SpaceX, shedding $400.8 billion in market value for the day, the second largest one-day market value loss for any U.S. company on record, according to Dow Jones Market Data. SpaceX’s closing market value was $2.04 trillion.
Wall Street isn’t offering much support on Monday. KeyBanc analyst Michael Leshock and his colleagues initiated coverage of the stock with a Sector Weight rating and no price target, citing the need for more evidence on the progress of SpaceX’s larger reusable rocket, Starship, to justify a more positive outlook.
“SpaceX possesses significant disruptive growth avenues, though we believe this is reflected in current valuation and risk/reward appears balanced, in our view,” Leshock wrote.
The KeyBanc team noted that it is tricky to value SpaceX, with no other company spanning its range of rocket launches, satellite broadband, and artificial intelligence. However, Leshock noted the company is currently trading at a price-to-sales ratio of around 29 times his forecast for its 2027 revenue—a significant premium to almost all its peers across the space, telecoms and AI sectors.
“We believe Starship-related milestones are what will ultimately dictate the pace of growth for the Connectivity segment (Starlink, Starshield) and non-terrestrial AI growth (future orbital data centers),” Leshock wrote.
Right now, analysts’ opinions on the fundamentals of SpaceX are likely to take a secondary role to trading dynamics. There are just 639 million shares available to trade, a fraction of the more than 13 billion shares that SpaceX has outstanding.
Barron’s has previously warned that the stock could come under pressure as employees and early investors are permitted to sell shares in the coming months under a staggered lockup release plan.
But it might be debt, not equity, that has SpaceX on the ropes on Monday.