Shares of SpaceX showed fluctuations at the opening of trading on Tuesday after a three-day sell-off that wiped out more than $600 billion from the market capitalization of the company led by Elon Musk, which is engaged in rocket building and satellite technology, UNN reports, citing Bloomberg.
Details
Shares fell 3.9%, briefly dipping below the $150 level at which they opened during their trading debut earlier this month. The volatility comes amid a broad sell-off in technology and other high-growth stocks, and the decline could push the company's market capitalization below $2 trillion, the publication notes.
The company is preparing to issue investment-grade bonds for the first time to finance a large-scale borrowing campaign as part of its ambitions in the field of artificial intelligence.
SpaceX IPO makes Musk the world's first trillionaire12.06.26, 09:05
After a record $75 billion IPO last week and an initial surge, enthusiasm for the stock, which was at the center of retail frenzy in speculative trading in the space and AI sectors, began to wane. On Wall Street, fears are growing that bets on AI are becoming overheated, and South Korean stocks fell 10% on Tuesday due to a drop in shares of chipmakers, the publication writes.
Overall, SpaceX has lost more than $600 billion after falling for three consecutive sessions. The 16% drop in shares on Monday resulted in a loss of about $400 billion, the second-largest single-day decline on record. Only the drop in Nvidia Corp. shares of approximately $590 billion, which occurred last year, was larger.
SpaceX, officially called Space Exploration Technologies Corp., is seeking to raise at least $20 billion through a bond offering, becoming the latest major technology company to turn to investors to expand its AI operations.
The planned bond issuance is highly unusual in the high-grade bond market, where investors typically lend money to well-known companies that manufacture cars or sell life insurance, the publication notes. SpaceX has not been profitable, and according to an analytical note from S&P Global Ratings published last week, the company is expected to burn cash until 2029.
In addition, SpaceX also entered into a multi-billion dollar agreement to provide computing resources to the AI startup Reflection AI, the company said on Monday.
Even with the recent losses, SpaceX shares are still up about 10% compared to the initial public offering price of $135.
Also on Tuesday, Susquehanna Financial initiated coverage of the stock with a neutral rating and a price target of $170. This price target implies potential upside of about 10% compared to Monday's closing price.
Currently, six companies tracked by Bloomberg recommend buying the stock, while two, including Susquehanna, give a "hold" recommendation. One company recommends "sell." The average price target is around $227, implying potential returns of about 47% above Monday's closing price, the publication writes.
After SpaceX's stock market debut, its shares outpaced Tesla in growth rates19.06.26, 00:38