SpaceX falls below $135 IPO price – Is the bottom here?

SpaceX's stock price is losing its luster in a rather brutal fashion.

After the U.S. stock market closed yesterday, its share price settled at $131. For a company whose IPO price was set at $135 and was hailed as a market darling on its debut day, this number signifies that a symbolic psychological threshold has been formally breached.

To make matters worse, the decline continued in after-hours trading. As of the time of writing, the after-hours share price has fallen to around $126.

A month ago, SpaceX landed on the Nasdaq with a valuation of approximately $2.5 trillion, carrying the grand narrative of being the "starting point for human interstellar civilization." Back then, the $135 IPO price was fiercely sought after, with the price briefly surging above $200. Now, it has retreated nearly 40% from its peak, and market sentiment has done a complete 180-degree turn.

With the $135 level broken, calls to "buy the dip" are starting to emerge on social media. But is $135 really the bottom?

1. $135 is the Underwriters' Price, Not the Market's Value Floor

Many investors view the $135 IPO price as some sort of "official guarantee floor" – believing that any price below this level represents a bargain. This is a common psychological bias.

The IPO price is a number negotiated between underwriters and the issuer. It reflects the supply-demand balance and fundraising needs in the primary market, not a consensus on the company's intrinsic value in the secondary market. Underwriters like Goldman Sachs and Morgan Stanley consider factors such as market sentiment, order book heat, and fundraising scale when pricing an IPO, but they do not strictly adhere to the fair value derived from a DCF (Discounted Cash Flow) model.

If we were to value SpaceX using traditional valuation tools, the resulting numbers would be sobering. According to public information, SpaceX's revenue in 2025 was approximately $18.7 billion. Plugging this into a DCF valuation framework yields a fair value per share in the range of roughly $50 to $60.

In other words, the $135 IPO price itself already contained a significant "narrative premium" – for future Mars colonization, the monopoly imagination of Starlink, and faith in Musk's personal execution capabilities. How much are these narratives worth? No one knows. But what is certain is that these are not numbers that DCF can calculate.

$135 is not the bottom. It was merely a starting point, one filled with emotional bubbles.

2. Double Headwinds from News Flow and Fundamentals

Recently, SpaceX has faced a dense cluster of negative catalysts.

The first blow came from China's aerospace sector. Not long ago, China successfully achieved rocket recovery and landing, meaning that the "reusable rocket" technology is no longer SpaceX's exclusive moat. When competitors begin to catch up with, or even approach the leading position in core technology, the "technology exclusivity" narrative supporting SpaceX's sky-high valuation inevitably shows cracks.

The second blow came from a launch failure. Just today, SpaceX's latest rocket launch mission was forcibly aborted during the final seconds of the countdown due to some engines failing to start normally. Although this failure caused no casualties or equipment damage, it serves as another reminder to the market: space launches remain a high-risk industry, and any technical malfunction can directly translate into delays in commercial orders and reputational damage. Following this news, selling pressure in after-hours trading intensified.

Challenged technological dominance + trust concerns triggered by a launch failure – these two factors combined are enough to make any rational investor reassess the risk-reward ratio of their holdings.

3. 5% Free Float + August Lockup Expiry: A Sword of Damocles

Beyond valuation and news flow, SpaceX's share structure itself harbors significant risk.

Currently, SpaceX's free float represents only about 5% of its total share capital. This number is extremely low, meaning the number of tradable shares on the market is very limited. In the early days of listing, this low liquidity, amplified by sentiment and bullish forces, acted as a booster for the surge – a small number of buy orders could drive the price up. But now that the trend has reversed, the same low liquidity will amplify the speed of the decline – a small number of sell orders can crash the price.

And a more severe test lies ahead: after the company's Q2 earnings report is released in early August, the first lockup period is set to expire.

This means a large number of early private shareholders – whose cost basis is far below $135 – will be eligible to sell their shares on the open market for the first time. Think about it: if you invested in SpaceX at $50 or even lower during a private placement round, a current stock price around $130 represents an unrealized gain of over 160% for you. When the lockup window opens, what is your first impulse?

Naturally, it's to cash out.

Buying SpaceX common stock before the lockup expiry means voluntarily standing in front of the coming supply shock, ready to catch the chips being thrown away by those eager to exit. This isn't so much an investment; it's more akin to catching a falling knife.

4. What If You're Already Stuck? 

Having laid out all these risks, the question remains: What if I've already bought SpaceX stock, am sitting on unrealized losses, don't want to cut my losses, but need a way to balance the risk?

The answer is: yes, there is a way. If you hold SpaceX stock but anticipate further downside in the short term – especially considering the supply shock from the August lockup expiry – you can use BIT's securities lending feature to short sell an equivalent number of SpaceX shares.

• If the stock falls, the short position profits, offsetting the paper loss on the long position.
• If the stock rises, the short position incurs a loss, but the gain on the long position covers it.
• As of July 31st, BIT is offering a limited-time $0 fee on securities lending, making the cost of shorting extremely low.

This is a "market-neutral" hedging strategy: you're not betting on direction, just on volatility. Using securities lending to lock in downside risk during the high-uncertainty window before the lockup expiry.

Additionally, BIT is about to launch U.S. stock options functionality. At that time, you could buy put options on SpaceX to purchase a "downside insurance policy" for your long stock position.

• Pay a premium to buy put options with a strike price of $125 or lower.
• If SpaceX plunges to $110 or lower after the earnings report or lockup expiry, the put options increase significantly in value, with profits that can cover or even exceed the losses on the long stock.
• If SpaceX rebounds, you let the options expire worthless, with the maximum loss being just the premium paid – compared to the stock's volatility, this "insurance cost" is manageable.

Compared to short selling via securities lending, the advantage of options is that losses are strictly capped. As an option buyer, you cannot be liquidated or face margin calls; your maximum risk is clear upfront.

5. Final Thoughts

SpaceX falling below $135 is not a signal to buy the dip, but a reminder: **valuations driven by emotion and narrative will ultimately return to the gravitational pull of fundamentals.**

$135 might not be the bottom, and $126 might not be either. Against the structural backdrop of a 5% free float, an August lockup expiry, and a DCF fair value far below the current share price, any hasty attempt to "buy the dip" carries extremely high risk.

For investors who are already holding, the rational choice is not to stubbornly hold on, but to use tools to manage risk. BIT Broker's securities lending feature and the soon-to-be-launched options functionality offer two distinct hedging paths – securities lending suits traders who want flexibility to adjust exposure, while options suit conservative investors who want to strictly cap their losses.

In the story of spaceflight, the most dangerous phase often occurs during the return to the atmosphere.

Risk Disclaimer: The market conditions, valuation estimates, and product descriptions mentioned in this article are for reference only and do not constitute investment advice. Trading in U.S. stocks and their derivatives involves market volatility, leverage, and liquidity risks; short selling via securities lending may involve unlimited loss risk; options trading carries the potential for total loss of premiums; past performance does not guarantee future results. Investors should make prudent decisions based on their own risk tolerance and consult professional investment advisors when necessary.