Elon Musk’s historic SpaceX debut caused a trading frenzy Friday, shooting the company to a $2.15 trillion valuation – but its sheer size is threatening to suck oxygen out of the rest of the market.
The rocket-launch firm debuted on the Nasdaq just after 11:47 a.m. at $150 a share, making it the largest-ever IPO – and making Musk the world’s first trillionaire. The stock closed up 19% at $160.95.
But other space stocks plummeted, suffering such big losses that they erased strong gains from the previous day as traders unable to get their hands on SpaceX shares attempted to cash in on the frenzy.
“It’s pulling a ton of money into just one company, which could temporarily drain liquidity from the rest of the market as investors focus on this,” Ken Mahoney, chief executive of Mahoney Asset Management, told The Post.
“This kind of massive offering draws in cash from all directions — big institutions, everyday investors, and funds that might otherwise be buying other stocks,” he added. “With so much excitement around SpaceX, some of that money is shifting away from smaller companies or different sectors, at least for now.”
Shares in Virgin Galactic, the space company founded by English business magnate Sir Richard Branson, plummeted about 30% Friday. The stock was down 11% this week.
Intuitive Machines and Rocket Lab Corporation fell 12.8% and 7%, respectively, over the week.
Satellite companies were also hit hard, since SpaceX owns Starlink – Musk’s satellite internet service provider, which has grown into a major defense contractor over the past few years. Its drones have reportedly been used in “kamikaze” attacks in Iran.
AST SpaceMobile, Planet Labs and Satellogic were down 12%, 8.8% and 11.4%, respectively, this week.
Kenin Spivak, chief executive of SMI Group, warned the SpaceX IPO could still create “a whirlpool effect unlike anything we have seen before.”
Bitcoin, for example, traded roughly flat Friday at about $63,000 – but the cryptocurrency was battered over the past two weeks, as analysts attribute the pullback to investors preparing for massive AI IPOs.
“The fact of the IPO and its performance will affect the funds available for other IPOs, particularly if SpaceX falls short of expectations,” Spivak told The Post. “We are in uncharted waters, with two supersized IPOs just ahead.”
AI firms Anthropic and OpenAI have also filed for IPOs. Their stock market debuts are expected later this year, though the companies have not set dates.
Mahoney warned that in the short-term, the massive SpaceX IPO could fuel more volatility in some areas of the market, though he remained optimistic about the long run.
Amid hopes for a US-Iran peace deal, the Dow Jones Industrial Average on Friday gained 353 points, or 0.7%, while the S&P 500 and Nasdaq jumped 0.5% and 0.3%, respectively.
SpaceX’s mammoth debut could boost investor confidence by signaling that AI, space and tech stocks have been undervalued, Mahoney said.
That’s a sharp turnaround from earlier this year, when investors were warning about a potential “AI bubble” akin to the dot-com crash of the late 1990s and early 2000s.
“The market has held on fairly well today. Some were speculating that the market would implode today, which of course did not happen,” Mahoney said.