TLDR
- SPCX dropped 6.8% on its first day in the Nasdaq-100, closing at $149.47
- Wall Street analysts have an average price target of $236.45, roughly 58% above Tuesday’s close
- At least 12 of the 17 IPO underwriters have initiated coverage — all with the equivalent of a Buy rating
- Raymond James issued the most bullish target at $800, calling Starship “the defining industrial innovation of our generation”
- SpaceX’s bonds fell in secondary trading after its $25 billion debt sale, raising questions about future capital needs
SpaceX’s (SPCX) first day inside the Nasdaq-100 didn’t go as bulls had hoped. The stock closed at $149.47, down 6.8%, slipping below the $150 opening price from its IPO on June 12.
Space Exploration Technologies Corp., SPCX
The drop came on a rough day for tech broadly. The Nasdaq composite fell 1.2%, weighed down by semiconductor stocks.
SpaceX’s IPO price was $135. The stock had climbed above $200 before pulling back, and Tuesday’s close marks its lowest level since the public listing.
Investors had been counting on index inclusion to drive demand. Mutual and exchange-traded funds tracking the Nasdaq-100 — with around $800 billion in assets under management — were expected to buy SPCX to match the index. Some of that buying may have already been priced in, with the stock rising nearly 6% the week before the addition.
“Hedge funds and short-term traders were playing the Nasdaq addition,” said Jay Hatfield, CEO at Infrastructure Capital Advisors.
Despite the sell-off, Wall Street analysts are largely upbeat. A wave of initiations hit Tuesday — 16 trading days after the IPO. Bloomberg’s tracking puts the average price target at $236.45, roughly 58% above where SPCX closed.
Analysts Set Lofty Targets
Of the 17 banks that underwrote the SpaceX IPO, at least 12 have released ratings. All 12 are the equivalent of Buy.
Raymond James issued the most aggressive target at $800. Analyst Brian Gesuale wrote that “Starship represents the defining industrial innovation of our generation.”
Deutsche Bank set a $255 target, pointing to reusable rockets, the Starlink satellite business, and what it called a “clear advantage” in deploying AI infrastructure in space.
JPMorgan projects 5,000 Starship launches by 2031. RBC sees 2,440 by 2030. The gap between those two numbers tells you something about how wide the uncertainty is.
Morgan Stanley’s Adam Jonas estimates SpaceX will need to raise $84 billion annually from 2027 to 2034. Goldman Sachs frames it as $270 billion in debt capital between 2026 and 2030.
The lone cautious voice came from Morningstar’s Nicolas Owens, who wasn’t an IPO underwriter. He called some of his peers’ valuations “a bit fantastical.”
Bond Market Flashes Caution
Shortly after its IPO, SpaceX sold $25 billion in bonds — its first-ever debt offering — largely to refinance an earlier bank loan.
The sale looked fine at launch, but the bonds quickly fell in secondary trading. The spread on bonds due in 2036 widened to 1.65 percentage points over U.S. Treasurys as of Monday, up from the initial 1.4 percentage points at issue.
SpaceX carries investment-grade credit ratings and holds more than $100 billion in cash against a $2 trillion market cap. But open questions remain around cash burn and future borrowing.
“There’s a lot of dust in the air,” said Davis Hebert, managing director at CreditSights.
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