SpaceX’s share price plunged 20% from its IPO! Its market value has been wiped out by over $1.2 trillion, and short sellers have profited nearly $8 billion.

According to Bloomberg, since the record-setting initial public offering (IPO) by Elon Musk’s space exploration company SpaceX last month, the stock price has plunged by about 20%, with the market capitalization shrinking by more than $1.2 trillion, setting a record for the largest-scale market cap loss in history. Against the backdrop of geopolitical volatility, worries about AI valuations, and the pressure from an upcoming wave of stock unlocks, the short-seller crowd has already made nearly $8 billion in profits.
(Background: Morgan Stanley: If SpaceX falls to $100, it means the AI valuation of Grok and Cursor is counted as zero)
(Additional context: SpaceX stock keeps sliding to a new low since the IPO! Space-themed stocks plunge together, and the market holds its breath waiting for Starship’s relaunch test flight)

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• AI valuation worries and unlock wave trigger selling pressure
• Shorts make $8B, and Morgan Stanley warns on key support
• Starship test flight succeeds, but still can’t reverse the slump

After the highly anticipated initial public offering (IPO), SpaceX, Elon Musk’s space exploration company, is now facing harsh tests from the capital markets. On July 28, Taipei time, according to Bloomberg, SpaceX’s stock price continued the sharp selloff that started after reaching a peak following its listing last month, and fell another 5% intraday to $107.80. From the high on June 16, the company’s market capitalization has already evaporated by more than $1.2 trillion, making it one of the largest market cap loss events in history.

AI valuation worries and unlock wave trigger selling pressure

The main reasons behind SpaceX’s sharp pullback stem from dual pressures from both the macroeconomic environment and market positioning. The report said that recent geopolitical volatility, combined with growing concerns in the market about massive capital expenditures supporting the AI (artificial intelligence) ecosystem at overly high valuations, has already hit multiple large technology giants, and SpaceX is not immune.

In addition, investors are closely watching the large sell pressure that could come from a “staggered lock-up” mechanism over the coming months. According to the IPO prospectus, stock unlocks will accelerate over the next few weeks; by August 6, up to 911.5 million shares could be available for trading. By the end of this year, the number of tradable shares is expected to expand sharply from the current roughly 639 million shares to 5.33 billion shares, creating a heavy burden on near-term stock price moves.

Shorts make $8B, and Morgan Stanley warns on key support

SpaceX’s extremely high valuation in the past, along with potential sell pressure from unlocks, has attracted a large amount of short-selling capital to move in. According to S3 Partners data, about 30% of currently tradable shares are being shorted. As the stock price has fallen sharply by 47% from the closing high on June 16, the shorts’ mark-to-market gains have approached $8 billion.

For its outlook, short investors have already treated $100 as a key psychological and technical threshold. In a newly released research report, Morgan Stanley analyst Adam Jonas warned that if SpaceX’s stock price falls below the $100 level, it would mean the market is assigning zero valuation to its AI-related business, and could even turn negative.

Starship test flight succeeds, but still can’t reverse the slump

Despite the headwinds in its stock price, SpaceX has still made progress on its real-world business. Last Friday, the company successfully conducted a test flight of its new-generation heavy-lift rocket Starship, deploying an upgraded version of the Starlink communications satellites successfully, and the rocket’s main body also returned to Earth largely intact.

Starship is crucial to Musk’s ambitions to expand the Starlink satellite network, achieve the plan for human spaceflight to the Moon, and even build data centers in space in the future. However, because its development is full of uncertainties—such as explosions, malfunctions, and schedule delays—this technological breakthrough has not yet been converted into a catalyst for lifting the stock price. The market is evidently more focused on imminent liquidity and positioning risks for the time being.