SpaceX officials celebrate the company's NASDAQ listing. [Reuters-Yonhap]
SpaceX officials celebrate the company's NASDAQ listing. [Reuters-Yonhap]

"Maybe it was a good thing we didn't get any IPO shares."

South Korean retail investors were left empty-handed during SpaceX's NASDAQ listing, unable to secure a single share despite intense demand. Within a month of the debut, the stock has tumbled more than 40% below its IPO price, turning the frenzy into regret.

Elon Musk had declared that if SpaceX achieved its goals, its value would surpass that of every other company on Earth combined — but even that confidence has done nothing to arrest the stock's slide.

SpaceX drew wide attention as the largest IPO on record. Yet concerns about an overvalued offering have mounted, and the share price has fallen day after day. Domestic space-themed exchange-traded funds, seen before the listing as virtually the only way for Korean investors to gain exposure to SpaceX, have also suffered heavy outflows and dismal returns — and losses have only deepened since the IPO.

On Friday (local time), SpaceX closed at $123.99 on the New York Stock Exchange, down 5.43 percent from the previous session. The stock first fell below its IPO price of $135 during intraday trading on Wednesday and has closed below that level every day since Thursday. The slide has erased roughly 1,500 trillion won ($1.01 trillion) in market capitalization.

A SpaceX Starship rocket sits on the launch pad after its 13th test flight, scheduled for Thursday, was called off. [Reuters-Yonhap]
A SpaceX Starship rocket sits on the launch pad after its 13th test flight, scheduled for Thursday, was called off. [Reuters-Yonhap]

Analysts point to a stretched valuation and earnings concerns as the main reasons SpaceX's share price has fallen below its IPO level. The company's price-to-sales ratio currently stands at around 100, meaning its market capitalization is more than 100 times its annual sales.

Adding to the pressure, SpaceX abruptly called off the 13th test flight of Starship, its next-generation flagship spacecraft. Starship is a 124-meter super-heavy launch vehicle developed by SpaceX. Musk has long spoken of using it to transport people and cargo to Mars.

A lock-up expiration scheduled for early next month is another major overhang. Institutional shareholders will be free to sell their holdings two trading days after the second-quarter earnings release, expected in early August. The volume subject to the lock-up is estimated to exceed 900 million shares, raising fears of further selling pressure once those shares hit the market.

Returns on domestic space ETFs that hold SpaceX have been equally grim. According to Korea Exchange data, the five domestic space-related ETFs that included SpaceX posted an average return of minus 27.91 percent from June 12 — the day of SpaceX's listing — through Thursday.

Wall Street analysts are divided on where SpaceX shares go from here. Morningstar has been particularly bearish, arguing the company's true value is only about half what the market implies and setting a fair-value target of $63. MoffettNathanson issued a neutral rating with a price target of $131.


park@heraldcorp.com