Expert Exchange: SpaceX plummets back down to earth after explosive IPO debut

SpaceX’s remarkable post-IPO rally has come full circle, with shares briefly revisiting their $135 IPO price after one of the most explosive public market debuts in history. To dissect the fallout after the hype and whether the valuation is sustainable, IG market analyst Tony Sycamore joins HotCopper today.

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SpaceX’s debut has been one of the most extraordinary IPOs in modern history. However, some weeks after it started trading, the stock has settled considerably.

The company stunned markets when it raised a record US$85.7 billion through its June initial public offering, listing at US$135 per share with an initial valuation of US$1.77T. It then hit a high of over US$225 a share just a few short days later, marking a 67% gain from the IPO price and pushing the market capitalisation to over US$3T – more valuable than both Microsoft and Amazon at the time.

The stock started to freefall in July, with the SpaceX share price falling in eight of the past ten sessions. Tony says a combination of factors is to blame for the turnaround: fading post-IPO hype, broader weakness in tech names, and questions over potential insider selling after the company’s first earnings.

Tony also addresses concerns over whether the valuation accurately reflects its long-term potential. Trading on an estimated 90-110 times forward revenue, it’s one of the most eyebrow-raising valuations in global equity markets.

Later in the conversation, we discuss early trends and signs in U.S. earnings season, and what’s predicted in that space in coming weeks.

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