Quick Look
- SpaceX shares rose 4% Tuesday, recovering from a nearly 24% loss over three days.
- The stock briefly dipped below its IPO price after a significant sell-off on Monday, but a new computing power agreement with AI startup Reflection may signal a turnaround.
AI-generated summary
Why It Matters
SpaceX experienced a significant stock price drop after a strong IPO debut, losing nearly 24% in three days and falling below its initial trading price. The company announced a notes offering and a major computing power agreement.
SpaceX shares climbed about 4% on Tuesday, bouncing back from a three-day skid during which the stock lost nearly 24%.
Shortly after the market open, shares slipped below $150, the price of its first trade when it debuted nearly two weeks ago. The initial slide also took the market cap below $2 trillion.
Elon Musk's space and artificial intelligence company saw a $400 billion sell-off on Monday, tanking 16%, following drops of 3.6% and 5% the previous two days of trading.
SpaceX posted huge gains after a record-breaking IPO on June 12, briefly surpassing Amazon and Microsoft in market capitalization, before falling back below both as sentiment cooled.
The company announced on Monday a senior unsecured notes offering and disclosed that it had $100.8 billion in cash and cash equivalents on hand as of June 19.
That same day, SpaceX also revealed it has signed a major computing power agreement with open-source AI startup Reflection, providing the company with access to Musk's Colossus infrastructure.
SpaceX's stock surged after its blockbuster debut, with shares rallying more than 50% on their offering price, as investors scrambled to buy into Musk's lofty ambitions for the company.
But by the end of last week the average investor who bought SpaceX shares had seen nearly all of their gains disappear.
Open Questions
- Will the AI infrastructure deal sustain SpaceX's stock price?
- What are the terms of the notes offering?
