SpaceX Stock Continues to Drop, Falling Under Its IPO Price—and 42% Below Peak

SpaceX shares closed below their $135 IPO price for the first time, marking a sharp decline from their earlier highs.

Broader market sentiment shifts and lock-up expirations could increase selling pressure—or get the shares rising again.

SpaceX (SPCX) shares finished Thursday below their $135 IPO price for the first time, closing down 3% at just above $131 as broader markets tumbled amid a tech sell-off. The move marked a fifth straight daily decline and punctuates a dramatic comedown for a stock that was launched to great hullaballoo in mid-June. Shares of the Elon Musk-led company have lost 42% of their value since hitting a record high above $225 a few days after the IPO.

What's the outlook now? Wall Street analysts remain broadly bullish, with Visible Alpha's mean price target above $290, though ongoing concerns about the outlook for tech stocks and the upcoming expiration of agreements that prohibit early investors from selling could weigh on SpaceX shares.

Hot IPOs often fall after an early pop, and SpaceX is no exception. Still, after a little more than a month, many are likely now trying to sort out how exactly to treat Elon Musk's big new public offering, shares of which ended Thursday below their IPO price.

Some investors now view the company as a "value stock," while Leuthold Capital in a note this week suggested that the shares are best left to those whose interest is "based on a desire to participate in some small way in the fantastic, almost unimaginable future that Isaac Asimov dreamt about."

SpaceX hasn't fallen in a vacuum, despite space being known for being one. Investors have, to start the second half, turned away from the corners of the AI trade—AI is part of SpaceX's business , along with connectivity and rockets—that were so powerful to start the year. That was certainly the case today , as measured by a few gauges: the tech-focused Nasdaq 100 index retreated 1.6%, while the SOX index of chip stocks dropped more than 4% and the Roundhill Memory ETF (DRAM) tumbled nearly 9%.

Market sentiment has changed quickly and could again; a softer-than-expected inflation reading this week, for example, may signal less need for the Fed to possibly raise interest rates. That could translate into more support for stocks seen as more speculative. (One place that has shown up: rising bitcoin prices .)

Still, investors have been wary about loading up on SpaceX even as some generally positive events, including the stock's addition to the Nasdaq 100 index, have passed. Some are now looking ahead to the start of the expiration of lock-up agreements that could mean more shares hit the market, which can mean selling by other investors ahead of that time.

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