It has been just over a month since SpaceX’s blockbuster IPO, but the company has already lost roughly as much value as Elon Musk’s other major company, Tesla, is worth.
Despite SpaceX’s falling stock price, Musk is already selling investors on another one of his businesses. SpaceX shares closed Monday at a record low of $113.50. That is about 24% below the $150 price at which the stock began trading on June 12.
The drop looks even steeper compared with SpaceX’s all-time high of $225.64, which it reached on June 16. At the time, the company’s market capitalization reached roughly $3 trillion.
SpaceX is now worth around $1.5 trillion, having shed about $1.5 trillion in market value in a matter of weeks. That is even more than the approximately $1.2 trillion market capitalization of Musk’s EV company, Tesla.
Losing a Tesla’s worth of value in a little over a month would be a major wake up call for almost anyone. Musk, however, does not appear deterred.
The Boring Company is still a thing, apparently
The Boring Company, Musk’s tunneling startup, is reportedly in talks to raise around $4 billion in a new funding round that would value the company at approximately $20 billion, according to The Wall Street Journal.
The company is known for tunnel-boring machines that it says are cheaper and faster than traditional methods. The Boring Company began as a project inside SpaceX before being spun off into a separate business in 2018.
Its main completed commercial project is the Vegas Loop, an underground transportation system that carries passengers in Teslas to and from the Las Vegas Convention Center and around the Las Vegas Strip. The company also has proposed projects in Nashville and Dubai.
Several other projects announced by The Boring Company over the years, including tunnels in Baltimore and Chicago, have failed to materialize.
Despite this, private-market investors still tend to view investments in Musk’s companies as relatively safe bets and remain eager to get in early, according to The Wall Street Journal.
For instance, investors who helped finance Musk’s $44 billion takeover of Twitter were in the red for months. But some eventually turned a profit after the social media company, now known as X, was acquired by Musk’s artificial intelligence startup xAI. SpaceX then later acquired xAI.
SpaceX’s eventual IPO instantly made it one of the most valuable publicly traded companies in the world and helped make Musk the world’s first trillionaire. His estimated net worth has since taken a hit alongside the company’s falling stock price.
Some investors aren’t buying into Musk’s promises
Part of SpaceX’s pitch for its massive IPO is that the company has future earnings potential that frankly has never been claimed by any company in history. In its IPO filing, the company estimates it has a $28.5 trillion total addressable market, with roughly $26.5 trillion expected to come from AI alone.
So far, some investors do not appear completely convinced, though SpaceX’s stock has also been caught up in a broader tech selloff over concerns about enormous capital expenditures related on AI.
That pressure could get worse when SpaceX reports its first quarterly results as a public company next week. A disappointing report could prolong the stock’s decline.
Additionally, up to 20% of certain investors’ locked-up shares will become eligible for sale on August 6, two trading days after the earnings report.
SpaceX and The Boring Company did not immediately respond to requests for comment.
