Shares of Elon Musk-owned SpaceX have fallen after strong success in the first few days of trading. The company made its debut on Wall Street on June 12, raising $75 billion for a market capitalization of $1.8 trillion.
The space exploration technology company set a fixed price of $135 per share in the stock market listing. Trading under the symbol SPCX saw massive growth as it surged above $200 and hit an all-time high of $202 per share. stock. The company’s market capitalization reached $2.6 trillion.
However, the shares have since stumbled, losing nearly 23 percent and currently trading at $153 a share. Some of the analysts described the situation as a buying opportunity for investors; however, others have warned that shares could fall sharply.
Why SpaceX Loses Billions in Market Cap After Largest IPO After Initial Success?
Although the current share price still offers significant upside from its IPO, history suggests that the company behind satellite Internet service Starlink is following a pattern often observed by Wall Street analysts.
According to a professor of finance at the University of Florida, Jay Ritter, about 9,000 companies have been listed on the US exchanges, and most of them saw an upside of 19% on the first day of trading.
The data suggests that most companies saw their shares fall 50% below their IPO price, indicating that SPCX is expected to fall to around $70 per share. share during the first trading year.
With annual revenue of about $19.3 billion and a valuation approaching $2 trillion, some analysts argue that the company’s valuation remains unusually rich.
Disclaimer: This article is for informational purposes only and should not be considered financial or investment advice.
