SpaceX Stocks Were Already Under Pressure. Then The Company Aborted a Starship Test Flight
SpaceX aborted the launch of its Starship rocket on Friday shortly before the expected time.
Company CEO Elon Musk said the reason for the decision was that “some of the engines didn’t start, triggering an automatic launch abort.”
“Now offloading propellant. Next launch attempt hopefully in a few days. To be confident of a good flight, 2 Raptors will be removed & replaced. Most probable launch timing is early next week,” he added in a social media post.
Company shares continued to fall on premarket trading, getting further away from its IPO price of $135.
The current scenario stands in contrast with that of June 16, when SpaceX shares closed at $201.80, capping a blistering rally fueled by optimism surrounding the company’s leadership in commercial space launches, satellite communications, and emerging artificial intelligence initiatives.
The drop comes even after the company entered the Nasdaq 100, unleashing a new wave of passing investors buying the stock as funds tracking the index matched its composition.
Those passive funds were required to purchase SpaceX shares as part of the benchmark’s rebalancing, a move that typically creates additional buying pressure. Yet the anticipated demand was not enough to offset broader selling, suggesting many investors had already positioned themselves ahead of the inclusion.
Moreover, a CNBC report detailed that short sellers are piling up bets against the company as the stock keeps falling. The outlet detailed that about 30% of the company’s publicly tradable shares are being sold short. It has climbed from between 5% to 7% three weeks ago, the outlet added, citing data from S3 Partners.
“We are seeing continuous demand from short sellers building speculative positions since the IPO,” Matthew Unterman, head of research at S3, told the outlet.
CNBC added that the shares’ lockup schedule could vastly increase the amount of publicly tradable shares over the next months. The company’s initial public float was about 5% of the some 13 billion shares outstanding.
However, major investment banks initiated research coverage last week with bullish ratings. Morgan Stanley assigned the stock an “overweight” rating and a $300 price target, while Bernstein began coverage with an “outperform” rating and a $239 target. RBC Capital Markets also rated the shares “outperform,” setting a $225 target, while UBS launched coverage with a “buy” recommendation and a $210 12-month price objective.
Analysts view SpaceX as the clear leader in reusable launch technology, a competitive advantage that has helped it dominate the commercial launch market while lowering costs. At the same time, its Starlink satellite internet network continues to expand globally.
Elsewhere, research firm MoffettNathanson initiated coverage with a neutral rating, arguing that much of SpaceX’s future growth already appears reflected in the share price. CFRA took an even more cautious stance, recommending investors sell the stock amid concerns that expectations have become overly optimistic following the company’s blockbuster market debut.
