SpaceX shares slip below IPO price after analysts set uniformly bullish targets
SpaceX stock fell below its $135 IPO price as analysts from major banks, who had issued largely optimistic price targets, saw the shares slide toward $125.
Shares of SpaceX fell below the $135 price set at its June IPO, trading around $123 after a sharp decline that followed a wave of bullish price targets from Wall Street banks. The dip erased nearly 60% of the stock’s value since it peaked at about $211 three days after debut.
In early July, analysts from eighteen of the banks that underwrote the offering released forecasts for the next 12 to 18 months. All but a few issued specific price targets, ranging from $190 to $800, with a median of $225. The highest target, $800, implied a 400% increase over the $160 closing price on July 6, while the lowest, $190, suggested a modest 19% rise.
The underwriters collectively earned roughly $500 million in fees on the $75 billion raised, with five large banks receiving about 85% of the allocated shares. Some banks, such as Morgan Stanley and Bank of America, used enthusiastic language in their reports, describing SpaceX’s ecosystem as “AI’s final frontier” and “paving the superhighway to the stars.”
University of Florida professor Jay Ritter, an expert on IPOs, noted that analysts appeared to be influenced by each other’s projections, often adding large percentage increases to the current price rather than offering independent assessments. He warned that the median target would lift SpaceX’s valuation to roughly $3 trillion by late 2027, a figure that would require earnings far beyond the company’s current performance.
Ritter added that valuing a newly public company with limited profitability is inherently uncertain, and analysts may resort to optimistic multiples when concrete metrics are lacking. The recent price drop highlights the gap between the optimistic forecasts and market reality.