SpaceX shares fall 40% from peak to approach IPO floor as regulatory scrutiny weighs

Shares of the American aerospace company SpaceX fell to as low as $136.78 at the trough of the trading session on Monday, July 13, representing a 5.87% decline compared to the close of trading on July 10. According to data from the US-based NASDAQ exchange, this retreat marks a depreciation of approximately 40% from the company’s historic peak of $225.64, which was recorded on June 16. With this latest decline, the company’s shares have approached their initial public offering (IPO) price threshold of $135.

As of 21:25 Moscow time on the trading day in question, the shares continued to trade at $137.4, down 5.4%.

The downward trend in the shares was driven by reports that the US Federal Aviation Administration (FAA) had concluded its investigation into the emergencies and malfunctions during the May 22 launch of Starship, the largest and most powerful rocket model developed by SpaceX.

According to CNBC, the agency reviewed and approved the findings and corrective measures submitted by the company following its internal investigation into the incident.

The Starship project, a massive, reusable rocket designed to carry crew and cargo to the Moon and Mars and to perform other space missions, is considered one of the most critical elements of Elon Musk’s space program.

In a statement issued by the FAA, it was noted that following the approved corrective actions, SpaceX is permitted to begin preparations for the Starship Flight 13 flight, provided that the company meets all safety requirements and licensing conditions.

The FAA had previously issued a statement regarding the malfunction during the launch attempt at the end of May. The statement noted: “The anomaly occurred during the Super Heavy booster’s flip maneuver over the Gulf of America.”

The region referred to as the Gulf of America by US authorities in official correspondence is commonly known as the Gulf of Mexico.

According to official data, the booster parts fell within the boundaries of pre-established hazard areas. Six flights were delayed and five aircraft remained in holding patterns for a period due to the incident, though no changes were made to flight routes.

SpaceX shares, which began trading on the NASDAQ exchange at the beginning of June, gained 25% at the opening. As part of the initial public offering, the company offered 555.6 million shares for sale at a fixed price of $135 per share.

The SpaceX IPO was recorded as the largest initial public offering in financial history. The company initially raised $75 billion, and the total funds raised reached $85.7 billion after consortium members exercised their over-allotment option to purchase an additional 83.3 million shares.

In a statement to his employees, company founder Elon Musk stated that going public was necessary to generate capital during a phase of rapid growth. It was announced that the proceeds would be used to complete the development process of the Starship rockets, bring them to commercial readiness, and expand the Starlink satellite network.

The post-IPO surge in SpaceX shares had briefly made Elon Musk the world’s first trillionaire. Bloomberg had estimated Musk’s wealth at $1.05 trillion, while Forbes valued it at $1.1 trillion.

However, with the decline in share prices and the company’s market value that began in late June, Musk lost his trillionaire title after holding it for 12 days.

According to an analysis by Bloomberg, the decline was driven by SpaceX’s preparations to issue at least $20 billion in bonds to finance artificial intelligence projects, alongside the signing of a multi-billion-dollar agreement with AI startup Reflection AI to provide computing resources.

Assessments by S&P Global projected that SpaceX will continue to incur expenditures without generating revenue until at least 2029.