SpaceX shares have been falling almost every day recently. The stock has dropped in 10 out of the last 11 trading sessions, showing a strong losing streak after its big IPO rally. The stock closed at $119.99 on Monday. It slipped another 0.3% during the latest trading session. This is a huge fall from recent highs. SpaceX shares were trading above $170 in early July, but have now lost around 30% of their value in just a few weeks.
SpaceX had a dream start after its IPO. The Elon Musk-led company launched its long-awaited IPO in June 2026, and investors rushed to buy the stock. The IPO opened at $150 per share. That was already an 11% jump from the IPO price before regular trading began. The excitement continued on the first day. SpaceX shares closed at $160.95, up 19.2%, after touching an intraday high of $176.52.
Why SpaceX stock is falling
The rally became even stronger a few days later. Four days after the IPO, the stock opened at $200.01 and closed at $211.39, making investors believe the rally would continue, according to Forbes. But the good times did not last. Soon after hitting those highs, the stock started falling sharply. By June 22, SpaceX shares had already dropped to $154.60. After that, the stock kept moving up and down while following an overall downward trend. By July 20, the stock opened at just $125.33. This showed how much the shares had fallen in a little over a month.
Experts say this kind of fall after an IPO is not unusual. Many newly listed companies see their shares become very volatile after the initial excitement fades. Forbes explained that companies mainly launch IPOs for two reasons. The first goal is to raise money for the business. The money raised helps companies grow. It can be used to expand operations, hire more people, build new projects, invest in technology and prepare for future competition.
How IPOs work
Most of the IPO money comes from early investors. These include venture capital firms, “friends and family,” wealthy clients and investors connected to the investment banks handling the IPO. Regular investors usually do not get the cheapest shares. The lowest IPO prices are often available only to selected early investors before public trading starts.
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The second goal of an IPO is to give early investors a chance to cash out. Venture capital firms and some early shareholders can eventually sell their shares and make profits. Some insiders cannot sell immediately. Many founders and early employees must wait through a lock-up period before selling their shares.
Why IPO stocks can fall
Heavy publicity before an IPO can push stock prices higher. If demand is much greater than the number of shares available, prices can rise quickly. But that excitement often fades. Once the initial buying rush slows, stock prices can fall back as investors rethink the company’s valuation. Forbes compared SpaceX’s decline with Meta’s IPO. When Facebook (now Meta) went public in 2012, its shares also fell sharply after listing before recovering later.
Meta’s stock dropped from about $38 to nearly $20 within months after its IPO. Later, the shares recovered and climbed higher by the end of that year. Market experts had already warned about IPO volatility. Sam Grelck, an equity strategy analyst at Truist Advisory Services, said major IPOs often experience large price swings during their first year, according to CBS News. He said even successful IPOs usually face big declines at some point. Strong early gains do not guarantee that the stock will keep rising.
Some investors may now be questioning whether all the IPO hype was justified. This kind of “buyer’s remorse” often happens when expectations become too high. Forbes said Starlink is currently SpaceX’s biggest money-making business. The satellite internet service generates much of the company’s revenue.
Another major reason for investor excitement was SpaceXAI. Investors hoped its artificial intelligence business would become a major growth driver. However, doubts about AI profits are growing. Investors are questioning whether AI businesses will generate enough revenue to justify massive spending.
AI growth and investor worries
Many companies are spending billions on AI. Businesses continue investing heavily in data centers and AI software from companies like OpenAI and Anthropic. The big question is whether those investments will pay off. Investors want to know when AI companies will start earning enough money to match their huge spending. Forbes compared the situation with Uber’s early years. Uber spent years growing its business before becoming consistently profitable.
Research suggests many companies are still struggling to get strong returns from AI. Only about 5% of businesses are getting substantial value from AI at a large scale, according to Harvard Business Review. Competition in the AI industry is growing. More companies are trying to win the same customers. This makes it harder for any one company to grow very fast.
Many investors buy IPO stocks because they hope to make quick profits, according to Forbes. But IPOs can also be risky. Instead of putting money into just one IPO, experts say it is safer to invest in different types of stocks. This can help lower the risk over the long term.
