- SpaceX shares dropped over 8% for the third straight day after bond sale news
- Company plans to raise at least $20 billion through its first investment-grade bond offering
- Stock rose 37% above IPO price but faced volatility due to low float and retail interest
SpaceX shares slipped for a third straight day after the Elon Musk-led company said it is selling investment-grade bonds for the first time, part of what's expected to be a massive borrowing spree to fund its artificial-intelligence ambitions.
The stock fell more than 8% less than an hour after exchanges opened Monday morning in New York. The drop follows a retreat of more than 8% over Wednesday and Thursday, before the US market closed Friday for the Juneteenth federal holiday.
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SpaceX's first days of trading following its record $75 billion initial public offering were met with the type of volatility generally associated with new IPOs that have a low float — 4.2% of total shares outstanding were available to trade on day one — and high interest from retail investors. Still, the shares were 37% higher than their $135 IPO price at Thursday's close, with a $2.4 trillion market capitalization.
The rocket, satellite and AI conglomerate is seeking to raise at least $20 billion from the first bond offering, Bloomberg reported last week.
The company's embrace of artificial intelligence with the acquisition of Musk's xAI in February meant investors closely watched the listing ahead of IPO prospects of competitors Anthropic PBC and OpenAI, both of which plan to go public as soon as this year with valuations expected to be about $1 trillion.
Retail trading in SpaceX, officially named Space Exploration Technologies Corp., was the strongest of any IPO in recent history, with the cohort buying net $405 million in the first five sessions according to Vanda Research. Retail investors bought more SpaceX last week than buying across all Magnificent Seven stocks combined, the data showed.
ALSO READ: SpaceX Shares End First Week of Trading Up 37% From IPO Price
The stock was initiated with a recommendation of sector weight at KeyBanc Capital Markets, the first hold-equivalent rating according to data tracked by Bloomberg. Analysts led by Michael Leshock wrote that SpaceX is set to remain the leader in space-launch and adjacent verticals, but much of the long-term value is already captured in the stock price.
SpaceX “possesses significant disruptive growth avenues, though we believe this is reflected in current valuation and risk/reward appears balanced, in our view,” he wrote.
(This story has not been edited by NDTV staff and is auto-generated from a syndicated feed.)
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