SpaceX Stock Falls 4% on Profit-Taking Despite Investment-Grade Ratings, June 19

SpaceX shares fell 4% on June 19 as investors locked in profits from the company’s record IPO rally. The stock remained up 37% from its $135 IPO price, but the pullback extended losses for a second straight day. The decline came despite three major credit rating agencies assigning SpaceX investment-grade ratings, signaling confidence in its market position.

Record IPO Followed by Profit-Taking

SpaceX raised $85.7 billion in its IPO, the largest in history. The stock opened at $150 on Friday and peaked above $225 during the post-IPO rally, briefly valuing the company near $3 trillion. On June 19, shares closed at $201.68, down 4% but still 50% above the IPO price. The pullback reflects typical post-IPO profit-taking as early investors sold positions.

Three Agencies Award Investment-Grade Ratings

Moody’s assigned SpaceX a Baa1 long-term issuer rating with a stable outlook, slightly higher than Tesla’s Baa3 rating. Fitch published a BBB+ rating with a stable outlook, citing the company’s 80% share of global mass to orbit since 2023. S&P Global assigned a BBB rating with a stable outlook. All three agencies highlighted Starlink’s 12 million subscribers and recurring revenue as key strengths underpinning the ratings.

Starlink Drives Cash Flow, AI Poses Risks

Moody’s noted that Starlink has become SpaceX’s primary cash flow generator, with improving scale and wider margins. The agency projects strong revenue and earnings growth through 2028. However, Moody’s flagged risks from the company’s heavy capital demands for AI buildout, sustained negative free cash flow, and dependence on the next-generation Starship V3 vehicle. Governance risks tied to concentrated voting power and reliance on Elon Musk also constrained the rating.

Valuation Concerns Persist Despite Ratings

At $201.68, SpaceX is now the sixth-largest publicly traded company in the US market. Morningstar analysts note the company is the most expensive in their coverage list by valuation multiples. By revenue and fundamentals, Morningstar says SpaceX has not yet justified its $2.64 trillion market cap. Pre-IPO investors will be free to sell 7% of outstanding shares after the company’s first earnings report, expected in late July or early August.

Final Thoughts

SpaceX’s investment-grade ratings validate its market position, but the stock’s 4% pullback signals profit-taking after a 50% rally. With the company still trading at extreme valuations and facing execution risks in AI and Starship development, near-term volatility is likely.

FAQs

Disclaimer:

The content shared by Meyka AI PTY LTD is solely for research and informational purposes.  Meyka is not a financial advisory service, and the information provided should not be considered investment or trading advice.