SpaceX falls below $135 IPO price as Tesla deliveries beat by 70,000

SpaceX's stock has lost more than a third of its value since its record-setting IPO, while Tesla's delivery beat offers investors a contrasting bet on Elon Musk's two public companies.

SpaceX shares slid below their $135 IPO price for the first time, while Tesla crushed second-quarter delivery estimates by more than 70,000 vehicles, presenting investors with diverging fortunes for Elon Musk's two listed companies.

"We think at this level, it's relatively safe to at least be involved from a trading perspective," said Jay Hatfield, chief executive officer at Infrastructure Capital Advisors. "We won't overweight it because they do have the lockup coming."

SpaceX closed at $135.27 on Wednesday after dipping as low as $132.15, extending its decline to 33% from a post-IPO record close near $202. The stock trades at 49 times expected revenue, more than three times Tesla's multiple of 15 times. Of the 32 analysts covering SpaceX, 27 recommend buying, one recommends selling and four are neutral, according to LSEG data.

The diverging trajectories of Musk's two public companies present investors with a stark choice. SpaceX faces a lockup expiry in early August that could release 911.5 million shares worth about $123 billion onto the market, while Tesla's delivery beat of more than 70,000 units above consensus signals demand is accelerating after a sluggish first quarter.

Lockup Overhang Weighs on SpaceX

The selloff has erased nearly $850 billion in value from SpaceX since its peak, according to Bloomberg data. The company's historic June IPO raised a record $86 billion and briefly valued the rocket maker at $2.1 trillion after its first day on the Nasdaq. But the stock has whipsawed since joining the Nasdaq-100 on July 6 through fast-entry rules, falling below its first trade price of $150 within days.

The upcoming lockup expiration poses the next major test. Rank-and-file employees and some early investors will be free to sell 911.5 million shares on the second trading day after SpaceX's debut quarterly report, expected in early August. Those eligible shares currently eclipse the $86 billion worth of shares available for trading. An additional 455.8 million shares could become eligible if the stock stays above $175.50 for at least five of 10 consecutive trading days through the earnings date.

Tesla's Delivery Beat Reshapes the Narrative

Tesla's second-quarter delivery beat by more than 70,000 units came as a surprise after the company reported its first year-over-year delivery decline in the prior period. The strong performance suggests Musk's focus on affordability and autonomous driving is resonating with consumers, even as competition from Chinese EV makers intensifies.

The contrasting valuations highlight a broader debate about Musk-related equities. SpaceX's revenue multiple of 49 times reflects investor enthusiasm for its Starlink internet service and government rocket launch business, even though the company reported a net loss of nearly $5 billion last year. Tesla's lower multiple of 15 times may reflect concerns about margin compression in an increasingly crowded EV market.

A Truist Wealth analysis of 30 major technology IPOs over the past 15 years found that newly public stocks averaged a maximum decline of 55% in the first year of trading, suggesting further downside for SpaceX cannot be ruled out. The weighted-average return for the class of 2026 US IPOs excluding blank-check companies fell to 5.3% through July 13, dragged down by SpaceX, Bloomberg data show.

This article is for informational purposes only and does not constitute investment advice.