It’s not unusual for a company’s price to fluctuate wildly in the weeks and months following an IPO. At the space company Space-X, the ups and downs are quite pronounced. A month after the IPO, the initial frenzy appears to have died down significantly, with the share price briefly falling below the $135 offering price on Wednesday. This is the first time this important mark has been lowered.
Space-X initially surged in the days following its June 12 IPO. Once bidding began, the price rose to about $160. A few days later, the share price exceeded $200, mathematically placing the company among the ten most valuable companies in the world. Space-X only had $19 billion in sales last year and posted a $5 billion loss. Given such modest business performance, some observers considered the offering price of $135 per share to be completely overpriced. The fall in prices since their peak in mid-June now appears to be proving them right. The company’s bonds have also lost significant value over the past few days. However, many analysts still recommend buying Space X shares and consider a price well above $200 realistic in the medium term.
Many German ETF investors are now also likely to be among the owners of the space company. In the past few weeks, equity index funds have had to buy Space-X shares because the company was quickly included in some indexes such as providers MSCI and Russell, as well as the Nasdaq 100. However, this demand, which was essentially automatically generated, apparently failed to significantly support the price in the stock market. The range of available Space X shares could also increase in the coming weeks. At the time of the stock exchange’s launch, only less than five percent of the company’s shares were listed for trading. However, early investors will soon be able to sell more shares. It is common practice that early investors are not allowed to sell their shares for the first 180 days after the stock market launches. At Space-X, according to the stock exchange prospectus, this 180-day period is shifted by a year so that shares do not go into trading all at once, but gradually. Some investors and employees may sell some of their shares soon after Space-X reports second-quarter results. This report is expected in early August.
By the way, Elon Musk, the largest shareholder of Space X, will not be able to sell his shares in the near future. It is impossible to predict how much they will cost then. After the IPO, Musk became a dollar trillionaire on paper within a few days; no one had achieved this before him. Due to Space-X’s price losses, he lost the title again.