SpaceX stock: has the post-IPO peak already passed?
SpaceX surged 67% after its record IPO before losing more than 25% from its high. Here's what the history of high-profile listings tells us.
An historic IPO that lived up to the hype
Space Exploration Technologies, better known as SpaceX, went public on 12 June in the biggest initial public offering in history, raising $75 billion. The listing immediately caught fire, with the stock surging from its $135 price to a peak of $225.64 on 16 June, a gain of 67% in just four trading sessions.
The early momentum was fuelled by several factors. Elon Musk's celebrity status drew enormous attention to the listing, and a deliberately limited float, with only 4.2% of total shares available to trade on day one, created a squeeze-like dynamic that amplified early price moves.
Retail investors piled in with unusual intensity. According to Vanda Research, net retail buying across the first five sessions totalled $405 million, more than buying across all Magnificent Seven stocks combined. That kind of enthusiasm can drive prices well beyond what fundamentals alone would justify.
But enthusiasm fades. Since its 16 June peak, SpaceX has declined more than 25%, including a 16% single-session drop on 22 June after it announced a debut investment-grade bond sale to fund its AI ambitions. The question now is whether this is a healthy consolidation or the start of a longer-term pattern seen in so many high-profile listings.
What history tells us about IPO surges
The record of big, hyped IPOs that rocket on debut and sustain those gains is short. According to research by University of Florida finance professor Jay Ritter, covering nearly 9,300 US-listed IPOs from 1980 to 2024, the average IPO stock underperformed a value-weighted market index by 21% in the three years following its first day of trading.
For larger companies with annual revenues above $500 million, the underperformance is smaller, around 5% over three years. But that still represents meaningful drag compared to simply owning the market. SpaceX's revenue run rate puts it squarely in this bracket, though its valuation makes even that comparison uncomfortable.
Recent examples are instructive. Figma surged more than 300% in its first two days before falling sharply. Cerebras Systems more than doubled on its first day, then retreated. Going further back, Rivian and Lyft both surged out of the gate before losing the majority of their gains. Alibaba fell 35% in year one, Visa dropped 25%, and Facebook lost more than half its value after listing.
A first-day gain of around 19%, which matches SpaceX's own opening performance, is historically close to the average across all IPOs. It's the trajectory after that initial pop that matters, and history is not especially kind to the stocks that follow with a further surge in the days that follow.
The valuation challenge
Even at its IPO price of $135, SpaceX was not cheap. The listing valued the company at roughly 100 times trailing sales, a multiple that bakes in enormous long-term growth expectations. After its opening-week surge to $225, that ratio rose even further. The subsequent pullback has brought the multiple back down, but at a market capitalisation still above $2 trillion the stock commands a premium that requires sustained, exceptional execution.
The longer-term opportunity is genuine. SpaceX's Starlink satellite internet business is growing rapidly, and its dominance in the space launch market is well established. Analysts covering the stock have noted its disruptive potential across multiple verticals, including satellite broadband, AI infrastructure through its xAI acquisition, and eventual Mars exploration ambitions.
Revenue of $1 trillion is sometimes cited as a target over the long term. That would be a remarkable achievement, but it is not close to being priced in as a certainty today. Markets are pricing in optimistic scenarios, and when that optimism hits any friction, the response can be sharp.
KeyBanc Capital Markets was among the first brokers to initiate coverage, with a sector weight, or hold-equivalent, rating. Its analysts noted that SpaceX's long-term value is already "largely captured in the current stock price," a view that will likely be shared by others as analyst coverage expands in the weeks ahead.
The lock-up expiry risk ahead
Beyond current valuation, SpaceX investors face a headwind that is common to all recent IPOs but perhaps more significant here given the concentration of insider holdings. With only 4.2% of shares available at launch, the bulk of the company's stock is held by insiders who are currently subject to lock-up restrictions.
Those restrictions are due to begin expiring in stages, starting around the time of SpaceX's second-quarter earnings report, expected in August. Each expiry gives insiders the ability to sell, and even if only a fraction choose to do so, the impact on supply and demand dynamics can be meaningful.
This is not unique to SpaceX. Lock-up expiries weighed on Airbnb, Rivian, and many other high-profile listings in their first year. The effect varies, but the pattern of stock pressure around these windows is well documented.
The bond sale announced on 22 June, targeting at least $20 billion to fund AI infrastructure, added a further element of caution. Issuing debt at scale is a normal corporate activity, but its timing spooked some investors who had expected SpaceX to self-fund its ambitions from operational cash flows.
Does the story still matter?
None of this means SpaceX is a bad business. It almost certainly is not. The combination of launch dominance, Starlink's subscription revenue base, and its positioning within the AI infrastructure boom gives it a genuinely compelling long-term narrative.
But in the near term, the story is facing a reality check. Musk's involvement has historically drawn both fervent supporters and significant sceptics, and both camps are active in this stock. The volatility seen in Tesla and other Musk-affiliated companies over the years provides some context for what owning SpaceX shares may feel like.
What the short history of this listing shows is that the enthusiasm of the first week may represent a difficult high-water mark. From its IPO price, the stock remains about 15% higher. But from the peak, it is already down more than a quarter, erasing over $600 billion in market value in three sessions.
For traders considering entering the stock now, it is worth asking whether the valuation still reflects long-term promise or near-term hype. Don't chase the story without understanding the risk.
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