SpaceX shares drop more than 14% after rocket company discloses it may take on billions in debt

SpaceX shares tumbled more than 14% Monday – their third straight day of declines — on news that Elon Musk’s rocket company could launch a massive borrowing binge.  After a blockbuster initial public offering earlier this month, SpaceX on Monday revealed in a regulatory filing that it plans to sell investment-grade bonds.The bond offering would aim to raise about $20 billion, according to reports, and could help bankroll costly AI development and longer term goals like building data centers in space. In addition to the offering of senior unsecured notes, the filing disclosed about $100.8 billion in cash.The shares on Monday afternoon were recently at $158.70, off 14% from Thursday’s close, giving the company a $2.09 trillion market capitalization.

That’s after SpaceX fell more than 8% Wednesday and Thursday before the US market closed on Friday.SpaceX would be the latest tech giant to turn to debt to finance pricey AI to-do lists.

This month Alphabet, Amazon and chip titan Nvidia have indicated they would tap debt markets. “Investors remain skittish about all these debt offerings on the Street but it’s par for the course in this AI arms race,” said Dan Ives, a managing director at Wedbush Securities.“We are seeing massive debt and equity raises from Big Tech players to fund major capital expenditure buildouts over the coming years.” SpaceX’s record-setting IPO on June 12 minted Musk as the world’s first trillionaire and raised nearly $86 billion.

The stock opened at $150 a share, making it the largest-ever IPO and immediately vaulted the company’s valuation above $2 trillion.It closed up 19.6% at $192.45.Retail investors helped power the offering in its first days of trading.

Everyday traders bought $405 million worth of shares in the first five sessions according to Vanda Research.Retail investors bought more SpaceX last week than buying across all Magnificent Seven stocks combined, the data showed.SpaceX revolutionized the space ...