SpaceX shares drop below $135 IPO price as rally that made Elon Musk a trillionaire fizzles

SpaceX shares dropped below their initial public offering price on Wednesday, a first for the company, just over a month after a frenzy over the rockets-to-AI firm powered the biggest IPO ever and made Elon Musk the world’s first trillionaire.Its shares slid 2.7% to $132.50, falling below the $135 apiece IPO price and well below the all-time high of $225.64, which propelled the company’s market valuation briefly above those of Silicon Valley giants Microsoft and Amazon.Many contended the stock’s rally was likely vulnerable to reversals, given SpaceX’s $4.9 billion in net losses last year and the uncertainty over the firm’s prospects as well as the stock valuations that might hold across the market at a time when inflation has been rising, putting the Fed’s policymakers on notice.The decline leaves investors who bought into the company at the IPO price sitting on paper losses for the first time, potentially testing confidence in the stock.It also offers a reminder that Wall Street enthusiasm can cool quickly, even for a company with the size and scale of SpaceX, which raised around $85.7 billion and fetched a valuation of around $2.1 trillion at the end of its first trading day.It is not uncommon for a stock to fall below the IPO price, especially during periods of broader market stress.Wall Street’s main indexes have been under pressure in recent weeks due to uncertainty around the Federal Reserve’s interest rate path and concerns about the durability of the rally powered by AI winners such as chipmakers.Still, the drop may bolster critics who had argued that SpaceX’s valuation was stretched, as the company was unprofitable and many of its ambitious bets were still untested.Investors would find better entry points after the first wave of excitement had faded, some analysts had warned before the IPO.The reversal also underscores the risks of chasing momentum, and the limits of a valuation driven more by narrative than near-term fundamental...