SpaceX Stock Falls 26% From Peak as Wall Street Weighs IPO Reality

SpaceX shares fell to $148 on Wednesday, down 26% from their June 16 peak of $201.80, as the aerospace company’s rapid entry into the Nasdaq-100 index triggered profit-taking among early buyers. The stock debuted June 12 at $135 per share and soared 50% in three days on retail and institutional demand. Now Wall Street faces a reality check: four major banks issued bullish ratings with targets up to $300, yet historical precedent warns that mega-IPOs often stumble in their first year.

Why SpaceX tumbled after Nasdaq inclusion

SpaceX joined the Nasdaq-100 on Tuesday, just 15 trading days after its June 12 debut. The rapid inclusion forced index funds and ETFs tracking the benchmark to buy shares to match the new lineup. Once that mechanical buying ended, profit-taking kicked in. The stock closed at $148 on Wednesday, below its $150 opening price for a second straight day.

Wall Street’s bullish case still stands

Morgan Stanley initiated coverage with an overweight rating and $300 price target, citing SpaceX’s lead in reusable rocket technology and Starlink’s growth potential. Bernstein set a $239 target, RBC $225, and UBS $210. Analysts point to AI product development and orbital data centers as long-term drivers. MoffettNathanson struck a neutral tone, but remained the minority voice.

History suggests deeper pain ahead

Among the 15 largest U.S. IPOs on record, the average stock traded 2% below its IPO price after one year but dropped 23% from the IPO price at some point during that first year. If SpaceX follows that pattern, shares could fall to $132 by June 2027, implying 11% downside from current levels. SpaceX raised $85.7 billion in its record IPO, the largest ever, which may amplify volatility as insiders and early investors eventually exit.

The IPO numbers that set records

SpaceX initially offered 555.6 million shares at $135 each. Underwriters exercised the greenshoe overallotment, allowing the company to issue more shares due to strong demand. The final raise totaled $85.7 billion, and the stock peaked at $201.80 on June 16 before the recent slide. The company’s market value at IPO was $1.7 trillion, the largest ever for a U.S. public offering.

Final Thoughts

SpaceX’s 26% pullback from its peak mirrors the volatility typical of mega-IPOs. Analyst targets remain elevated, but historical data warns that large debuts often underperform in year one. Investors should weigh the bullish long-term thesis against near-term pressure from lockup expirations and profit-taking.

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