The shine has worn off Elon Musk’s SpaceX stock as its valuation has plummeted, and investors are now closely scrutinizing future profit prospects.
Musk’s stint as a trillionaire was short-lived—lasting barely a month. A record-breaking IPO had propelled SpaceX’s share price to an all-time high of $225, but the stock price has since fallen by nearly half.
Musk has seen a massive drop in his net worth, losing his trillionaire status. Meanwhile, the value of his electric vehicle company, Tesla, has also fallen by 18 percent in a week, driven by disappointing earnings reports.
According to a Washington Post report, the ‘honeymoon’ with investors is officially over, as wild expectations give way to rigorous scrutiny of business fundamentals.
David Meier, a senior investment analyst at The Motley Fool, told the Post, “One advantage of being a private company was that there was no market to weigh and evaluate business decisions.” “Being a publicly traded company means everything gets valued, and information spreads through market prices. Consequently, every SpaceX launch, every Starlink decision, and every xAI move will be scrutinized by the market.”
This scrutiny has revealed some troubling realities. SpaceX stock took a significant hit after a launch was aborted due to an engine malfunction. According to a report by The Post, “The company is using a rocket nearly 400 feet tall to power its data center and exploration-related projects—including missions to return humans to the moon. However, the program is grappling with a lack of confidence and repeated explosions. While SpaceX has proven its ability to launch satellites and even people into orbit, much of its success has relied on older, lower-capacity launch vehicles.”
Noting that SpaceX has reported losses of at least $13 billion since 2023—raising fundamental questions about profitability—Meir suggested, “One possible reason is that investors had time to digest the financial data and concluded the valuation was too risky,” leading to a “rapid sell-off.”
The reasons for Tesla’s decline are different. Musk has systematically moved away from the automotive business that made Tesla the world’s most valuable car company, betting instead on robotics and “physical AI”—specifically his upcoming Optimus humanoid robot.