SpaceX shares have experienced a sharp decline over three consecutive trading sessions, falling to their lowest level since the company's public market debut. The stock closed at $154.63 on Monday, a drop of approximately 16% on the day, bringing it close to the $150 opening price set during its initial public offering. This retreat has erased more than $600 billion (€524.2 billion) in market capitalisation, reducing the company's valuation to just over $2 trillion (€1.74 trillion).
The sell-off follows a remarkable rally that saw shares climb from $150 on 12 June to nearly $226 by 16 June, a gain of roughly two-thirds before the company had published any quarterly results as a public entity. That surge was driven by high expectations for SpaceX's artificial intelligence ambitions and a thin pool of freely traded shares, leaving the stock vulnerable to a sharp reversal when sentiment shifted.
SpaceX now ranks as the seventh most valuable company globally, trailing Taiwan Semiconductor Manufacturing Company (TSMC). The decline has erased most of the gains made after the IPO, with shares currently trading over 30% below the intraday high of around $226 and only 3% above the opening price.
First Bond Sale to Fund AI Push
The latest leg of the decline coincided with SpaceX's entry into the corporate bond market. The company announced an inaugural offering of senior unsecured notes, with sources familiar with the plans estimating the target at around $20 billion (€17.4 billion). The proceeds are primarily intended to repay a bridge loan taken on during SpaceX's merger with Elon Musk's AI venture xAI earlier this year, with the remainder allocated for general corporate purposes.
The bond sale follows investment-grade credit ratings awarded last Friday by all three major agencies: Moody's at Baa1, Fitch at BBB+, and S&P Global at BBB. These ratings open the door to cheaper borrowing and a broader pool of institutional lenders, a move that could have implications for European investors and companies watching SpaceX's financial strategy.
In documents tied to the offering, SpaceX disclosed a cash position of roughly $100.8 billion (€88 billion) as of 19 June, much of it raised during the IPO, alongside $29.1 billion (€25.4 billion) of long-term debt. This combination of vast cash reserves and fresh borrowing so soon after a record flotation has unsettled some investors, who interpret the rapid fundraising as a sign of heavy spending ahead as SpaceX scales its AI and data centre plans.
The development highlights the growing intersection of space technology and artificial intelligence, a sector where European firms like Airbus and Thales Alenia Space are also active. While SpaceX's moves are primarily US-focused, the company's market volatility and financing strategies could influence investor sentiment across the Atlantic, particularly as European regulators push for deeper capital markets integration. As European Central Bank President Christine Lagarde has argued, a more unified capital market is essential for the euro's future and for European competitiveness in high-tech sectors.
For European investors, the SpaceX saga underscores the risks of betting on high-growth tech stocks with limited trading liquidity. The company's rapid ascent and subsequent correction serve as a cautionary tale, especially as European markets grapple with their own tech valuations and the need for diversified funding sources. The bond market debut also raises questions about corporate debt levels in an era of rising interest rates, a concern that resonates in Europe where companies face similar pressures.
