SpaceX closed at $148 on Wednesday. That is $2 under the $150 price at which it opened its first trading day on June 12, and the second session in a row below it, even though the company had joined the Nasdaq-100 index earlier in the week.
Index funds and exchange-traded funds that mirror the Nasdaq-100 had to buy SpaceX shares to reflect the new line-up. That kind of forced buying usually lifts a stock. This time it did not, and IBTimes noted that many investors seemed to have bought ahead of the inclusion.
A fast track into the index
The company was added on Tuesday, under a month after going public. The index normally expects a company to have been listed for at least 12 months, but the exchange recently changed its eligibility rules for newly listed firms. Briefs.co reports that the new rules allow early entry for companies above a certain market value, and that SpaceX’s valuation exceeded $250 billion at the IPO.
From $135 to $201.80 and back down
The listing was the largest initial public offering in US history. SpaceX sold 555.6 million shares at a fixed $135 and raised $85.7 billion once underwriters exercised the full overallotment, known as the greenshoe. That option lets a company issue extra shares if demand outruns supply.
The stock opened at $150 and ran hard. By June 16 it had closed at $201.80, its peak close so far. Since then traders have taken profits and the price has given back a large part of the gain.
Analysts split
Several banks started coverage this week, and most were bullish:
Morgan Stanley rated the stock overweight with a $300 target. Bernstein went with outperform and $239. RBC also chose outperform, at $225, and UBS began with a buy rating and a 12-month target of $210.
The bulls point to SpaceX’s lead in reusable rockets, its growing Starlink satellite internet network, and room to improve margins in both. Some also see a path into artificial intelligence products, such as coding tools that could compete with offerings from Anthropic and OpenAI, and into orbital data centers.
Not everyone is convinced. MoffettNathanson started with a neutral rating, arguing that much of the future growth is already in the price. CFRA went further and told investors to sell, citing concern that expectations had become too optimistic after the blockbuster debut.
Targets that run from $210 to $300 show how wide the disagreement is. The $201.80 high still sits far above where the stock trades, and the slide below $150 has unsettled some holders. The next catalyst analysts mention is a planned Starship orbital test flight.
Sources
- SpaceX Shares Sink Below Its Opening Price After Nasdaq 100 Entry As Momentum Falters
- SpaceX Shares Dip Below IPO Price on Nasdaq-100
