SpaceX has a problem.
Well, it has a few problems, but I鈥檓 not talking about their rocket problem, their satellite problem or even their Elon Musk problem.听It has an expectations problem.
Just over a month after the biggest IPO in history, SpaceX shares have fallen below their $135 IPO price for the first time, dipping as low as $132 before recovering slightly. Indeed, the stock is down more than 30% from its post-IPO peak, wiping more than $1 trillion from the company鈥檚 valuation.
So, what happened? I think one of the first things many people who aren鈥檛 IPO experts thought when seeing this news was, is this it? Is this the 鈥淚 told you so鈥� moment that every SpaceX critic has been waiting for?听Did investors finally realise the valuation had become detached from reality?
Or, on the other hand, is Wall Street just kind of overreacting to what may simply be a normal post-IPO correction?
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Was The Valuation Always The Real Story?
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The interesting thing about the SpaceX sell-off is that very few people are questioning whether the company itself is impressive.听SpaceX remains the dominant player in commercial launches, Starlink continues to grow and the company has government contracts, ambitious expansion plans and enough technological achievements to fill several history books. Of course, that doesn鈥檛 mean people haven鈥檛 questioned some (read, 鈥渕any鈥�) of Musk鈥檚 wild ideas and plans.
But the point in this moment is that the debate has mostly been centred on the price.
According to Reuters, SpaceX debuted at a valuation of around $2.1 trillion before briefly climbing above $2.6 trillion during its post-IPO rally.听 And that is, objectively, astounding. It鈥檚 an extraordinary number by any measure
But the question, when this happened, wasn鈥檛 so much about whether SpaceX was good enough to deserve this valuation, but rather, whether any company at all deserves that sort of valuation.
For many sceptics, and not even the hardcore ones, the answer was always no.
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Was SpaceX Being Valued As A Space Company?
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Something very worth considering is whether investors were ever valuing SpaceX as a rocket company in the first place After all, it鈥檚 called 鈥淪paceX鈥� and all we ever hear Elon talk about is moving to Mars.
But, as some previous TechCrunch reporting has noted recently, SpaceX鈥檚 public-market story really does go beyond launches. The company has increasingly positioned itself around AI infrastructure, Starlink, connectivity and future computing ambitions.
Indeed, if investors were buying a future AI and infrastructure giant, then the valuation was never really about how many rockets SpaceX launches each year. rather, it was about everything the company might become.
And I think this helps explain why opinions remain so divided on the SpaceX topic. That鈥檚 probably why, even now, some of the most fervent SpaceX believers are still pretty confident that the company may, one day, be worth more than $10 trillion. And at the same time, critics are arguing that even the current valuation remains difficult to justify using conventional financial metrics. Because we鈥檙e talking about potential
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So, Is This About Starship Or..?
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The timing of the decline has inevitably led some people to focus on Starship and SpaceX鈥檚 upcoming launch schedule. But most people who have kept a close eye on things seem to be paying closer attention to valuation and growth expectations rather than any single rocket launch.
So yes, sure, the stock鈥檚 decline has happened just ahead of another Starship launch, but most of the broader discussion has been centred on whether SpaceX鈥檚 valuation ran too far ahead of its fundamentals. That is, it鈥檚 about more than just a rocket.
Of course, that also doesn鈥檛 mean Starship is irrelevant. Future Starship missions remain central to many of SpaceX鈥檚 long-term ambitions and they will very much influence the company鈥檚 trajectory and valuation. However, the current debate is not so much about advanced engineering and more about whether investors were pricing in years of future success before it had actually materialised. Counting their chickens, so to speak.
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Is Elon Musk Part Of The Equation?
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It would be impossible to discuss SpaceX without discussing Elon Musk.听Supporters would argue that betting against Musk has rarely worked out well, while critics would counter that investors have a tendency to assign almost limitless future value to businesses associated with him.
And there鈥檚 at least a little bit of truth to both sides.听The challenge for SpaceX is that it鈥檚 no longer being judged solely on launch contracts or satellite growth. In fact, it鈥檚 increasingly viewed as part of a broader Musk ecosystem spanning AI, communications, social media and future infrastructure projects.
That creates enormous potential, but it also leads to significant (shall we say 鈥済reat鈥�) expectations.
And to be honest, it鈥檚 not just Musk who finds himself in this position. While we鈥檙e living in this bizarre reality of major tech giants and their cults of personality, it鈥檚 important to acknowledge that they鈥檙e all creating huge expectations about both their current and future endeavours 鈥� from Elon Musk in this case to Jeff Bezos, Mark Zuckerberg and Sam Altman.
Maybe This Is Just What Happens After IPOs鈥�
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Of course, there is one other possibility.
That is, maybe this actually isn鈥檛 that weird after all. Maybe we鈥檙e making it weird because it鈥檚 Elon Musk, it鈥檚 SpaceX and there are a few extra zeros involved in this equation.
According to Reuters, only a small percentage of SpaceX shares were initially made available for trading, which helped fuel demand and drive the stock sharply higher after listing. The company is also approaching lock-up expiries that could allow many more shares to enter the market over the coming months.
At the same time, Reuters reports that 27 of 32 analysts still rate the stock a buy despite the recent decline.
In other words, while sentiment has cooled, there are still many professional investors who remain optimistic about the company鈥檚 long-term prospects.
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So, Did SpaceX Fly Too Close To The Sun?
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That depends on what exactly flew too close. If we鈥檙e talking about the company itself, then probably not. Indeed, SpaceX remains one of the most influential technology businesses in the world, but its valuation is another matter entirely.
Critics argue that investors became caught up in a story that combined rockets, AI, satellites, Elon Musk and the promise of future technological dominance, while supporters argue that the recent sell-off says more about short-term market psychology than it does about SpaceX鈥檚 long-term potential.
So for now, both sides have evidence to support their case. But what seems harder to dispute is that the conversation was never really about whether SpaceX could change the future. It鈥檚 more about how much investors were willing to pay for that future today.
