SpaceX Stock Falls 6.5% as Post-IPO Rally Cools, June 20

SpaceX shares fell 6.5% to $178.50 on June 18, ending a volatile first week of trading as a public company. The stock still trades 32% above its $135 IPO price from June 12, but profit-taking and valuation concerns have tempered early enthusiasm. The company announced a $60 billion all-stock acquisition of AI coding startup Cursor, raising questions about execution risk and future profitability.

The Pullback After Explosive Gains

SpaceX opened at $150 on June 13 and peaked near $202 before falling 6.5% on June 18. The stock gained 37% in its first week, making it the sixth-largest US company by market cap at $2.64 trillion. Retail investors drove much of the early demand, with the group allocated 20% of IPO shares. Analysts attributed the pullback to exhaustion after a near-vertical move and limited float, not fundamental deterioration.

Valuation Concerns Weigh on Investors

Morningstar analysts placed SpaceX’s fair value at $63 per share, less than half the IPO price. The company trades at roughly 67 times sales, about three times Nvidia’s revenue multiple. SpaceX reported a net loss of $4.28 billion in Q1 2026 and full-year 2025 losses of $4.94 billion, though revenue rose 33% to $18.67 billion. Most revenue comes from Starlink satellite service, not the unproven Starship rockets or orbital data centers analysts expect to drive future growth.

The $60 Billion Cursor Deal Adds Pressure

SpaceX announced the Cursor acquisition on June 16, paying $60 billion in new equity issuance. The all-stock deal signals SpaceX’s pivot toward AI software, following its earlier xAI acquisition. Wall Street debate centers on whether AI application-layer companies justify massive premiums. SpaceX’s bankers are also preparing a $20 billion bond offering to refinance debt from the xAI deal, marking the company’s first investment-grade issuance.

What This Means for Investors

With Morningstar rating SpaceX significantly overvalued at $63 fair value versus the current $178.50 price, the data points to limited upside and material downside risk. Pre-IPO investors can sell 7% of outstanding shares after the first earnings report in late July or early August, potentially adding selling pressure. Volatility is likely to persist as the market weighs lofty growth expectations against unproven technologies and mounting losses.

Final Thoughts

SpaceX remains 32% above IPO price despite the pullback, but Morningstar’s $63 fair value suggests significant downside. Investors should await Q2 earnings and monitor pre-IPO lockup expiration before adding exposure.

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