SpaceX Shares Sink to Near IPO Price, Down 33% From Post-Listing High

SpaceX shares fell for a third straight trading day, sliding back toward their initial public offering price. The move has brought the stock close to a key test of investor sentiment in the early weeks after its listing.

Bloomberg reported that SpaceX fell 2.2% to close at $136.08 on July 14. That left the stock just $1 above its $135 IPO price from last month.

The shares have dropped about 33% from the high reached shortly after the listing. The company's market value has also shrunk by about $850 billion.

Investors often view a fall below the IPO price soon after a listing as a sign that the early excitement generated by the company and its underwriters is fading. A break below that level could deal a sharp blow to sentiment.

Some market participants have also pointed to SpaceX's valuation as an overhang. Its forward price-to-sales ratio is above 30, placing it among the more richly valued companies in the Nasdaq 100. Investors are also watching for a wave of insider selling in the coming months as lockup restrictions are lifted in stages.

Ken Mahoney, chief executive officer of Mahoney Asset Management, said he does not believe SpaceX shares have found a bottom yet. The key question is how much demand the market can generate to absorb the additional supply of shares expected to come to market.

Wall Street's long-term outlook remains positive. More than 10 investment banks, including Morgan Stanley, JPMorgan and Goldman Sachs, have recently issued buy ratings on SpaceX.

More than 80% of analysts covering SpaceX currently recommend buying the stock, and their average price target is $236.25, more than 70% above the current share price.

Bloomberg said volatility is common among newly listed stocks. Truist Wealth's analysis of 30 major technology IPOs over the past 15 years found that the average maximum first-year drawdown was 55%.