Trillion Dollars Wiped Out: The Stock Everyone Bought Last Month Is Crashing

SpaceX stock has plunged over 50% from its peak, erasing nearly a trillion dollars in value. Small investors who bought at the high are losing, while short sellers celebrate with $8.7 billion in profits. The company faces operational difficulties and slowing growth, and the market awaits earnings reports and the unlocking of restricted shares.

Just five weeks after the largest IPO in history, Elon Musk's SpaceX stock has plunged over 50% from its peak of $225, wiping out nearly a trillion dollars in value. Small investors who bought at the high are down 50%, while short sellers have recorded paper profits of about $8.7 billion. About 32% of available shares are in short positions—an unusually high level. Musk tried to calm investors with a tweet on X, claiming the company will be worth 'more than Earth' in the future. The decline comes amid operational challenges: delays in Starlink satellite launches and postponement of the Starship test. Revenue growth slowed from 33% to 15%, and the company reported a net loss of $4.9 billion on revenue of $18.7 billion. The next two weeks will be critical: on August 4, SpaceX will report financial results for the first time as a public company, and two days later, the lock-up on about 911.5 million insider shares expires. An additional restricted block of 455.8 million shares will be released if the stock closes above $175.50. Despite the declines, the stock still trades at 49 times revenue, while Morningstar estimates a fair value of only $780 billion.