SpaceX Stock Wipeout: How Elon Musk Lost His Trillionaire Title

Explore the untold story of market volatility, global competition, and the risks behind Musk’s empire.

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I’ve been watching this SpaceX story for a few weeks now, and honestly, I did not expect it to unravel this fast. One month you’re reading headlines about Elon Musk becoming the world’s first trillionaire, and the next month his net worth has dropped by hundreds of billions of dollars because the stock that made him a trillionaire in the first place is falling apart. If you’ve been following the markets even loosely, you probably felt a bit of whiplash too. Let me walk you through what actually happened, why it happened, and what I personally think is coming next.

The trillion dollar rocket ship that lost its shine

Here’s the quick version for anyone who missed it. When SpaceX went public, the stock opened around $135 and within days it had rocketed all the way up to over $225 a share. At that peak, SpaceX’s total valuation touched close to $2.9 trillion, which is a genuinely wild number for a company that still doesn’t turn a profit. That valuation briefly pushed SpaceX past Amazon and Microsoft to become one of the five most valuable public companies on the planet, and it’s the reason Elon Musk’s personal net worth shot up to nearly $1.5 trillion.

But stocks that rise that fast rarely stay up there, and this one didn’t. Within a matter of days, the shares cratered over three straight trading sessions, closing around $154.60. That single move wiped out roughly $600 billion in market value from the peak. If you measure from the very top of $225.64 down to where things stand now, the total value destroyed is closer to $920 billion. I don’t say that number lightly. That’s an amount of wealth larger than the entire economy of most countries, gone in a matter of weeks.

And because Musk’s fortune is so tied up in SpaceX shares, his own net worth fell right alongside it. He went from flirting with trillionaire status to sitting somewhere around $900 billion. Still an enormous amount of money by any normal standard, but a huge step down from where he was.

In my opinion, this was never going to end any other way. When I first looked at the numbers behind this IPO, I remember thinking the math simply did not add up. Big tech companies usually trade somewhere around 20 to 30 times their annual sales, and that’s already considered a rich valuation. SpaceX, at its peak, was trading at more than 90 times its revenue. That’s not growth optimism anymore, that’s a company being priced like it has already invented something the rest of the world doesn’t even have yet.

SpaceX bond offering rattles an already fragile stock

If you’re wondering what actually triggered the sharpest part of the drop, it traces back to a single filing. On the morning of the crash, SpaceX confirmed with the SEC that it was launching its first-ever investment-grade bond sale, aiming to raise at least $20 billion in senior unsecured notes. Word of this had already leaked out a few days earlier, so the market had time to get nervous about it, but the official confirmation is what really set off the selling. The stock dropped over 16% in a single day once the filing hit.

Think about what that actually means for a second. A company doesn’t go out and borrow $20 billion through bonds because everything is running smoothly and cash is piling up. It does that because it needs money, and it needs a lot of it, fast. That’s exactly the kind of signal that makes investors who bought in during the IPO hype start to second guess themselves.

To be fair to SpaceX, all three major credit rating agencies still handed the bonds investment-grade ratings. Moody’s rated it Baa1, Fitch gave it BBB+, and S&P landed on BBB. Those aren’t bad grades. But if you read past the headline rating, the details tell a more cautious story, which brings me to the next part of this.

S&P projects negative SpaceX free cash flow through 2029

This is the part that stood out to me the most. S&P projected that SpaceX will keep posting negative free cash flow all the way through 2029, mainly because of how much money is being poured into Starship development and AI infrastructure.

Moody’s went a step further and flagged governance concerns, pointing directly at how much voting power is concentrated in one single person. You don’t need me to tell you who that is.

Then there’s the spending forecast that really made my jaw drop. Evercore ISI expects SpaceX’s yearly capital spending to explode from around $20 billion in 2025 to a staggering $732 billion by 2031, with roughly $666 billion of that going toward AI infrastructure, not rockets or satellites. Goldman Sachs, who actually led the underwriting on this IPO, projects the company will post a negative $105 billion in free cash flow in 2029 before finally turning cash-flow positive in 2031.

Here’s my honest take on this. A rocket company that is spending three-quarters of a trillion dollars a year, with the vast majority of that going into AI rather than space hardware, is not really a space company anymore. It’s an AI infrastructure company wearing a rocket company’s name. And when your own underwriter is telling investors not to expect positive cash flow until 2031, that’s not a small footnote, that’s the entire investment thesis on shaky ground.

How China’s reusable rockets change the whole picture

Now let’s talk about the piece of this story that I think gets less attention than it deserves, and that’s China. One of the biggest reasons SpaceX could justify such a sky high valuation was its monopoly on reusable rockets. Nobody else in the world had actually landed a rocket and flown it again at scale, which meant SpaceX could launch things for a fraction of what it used to cost anyone else. That monopoly is exactly what let SpaceX dream up ideas like building data centers in space, since space offers free cooling and, in theory, a safer environment than Earth.

But China has now successfully tested its own reusable rocket. They haven’t flown a reused booster yet, but landing it back safely is already a massive technical milestone, and it usually doesn’t take long to go from landing to reflying once you’ve cracked that problem. If China gets there within the next year or two, and I personally think they will given how fast their space program has moved recently, SpaceX’s cost advantage starts to disappear.

This matters enormously for Starlink too. Right now, if you’re anywhere in the world and you want satellite internet with no other option, SpaceX has you. But once China has its own cheap, reusable rockets, other countries are going to start building their own satellite internet networks instead of paying SpaceX for Starlink.

Suddenly Starlink’s addressable market shrinks down mostly to the United States, and the huge revenue projections that were baked into that trillion dollar valuation start to look a lot less realistic. Some analysts put Starlink’s total revenue this year around $16 to $20 billion, with an optimistic ceiling near $31 billion. Even at the high end, that is nowhere close to justifying a $2 trillion price tag when you compare it to companies like Microsoft or Amazon, which earn similar or higher valuations while actually posting real profits.

Why this reminds me so much of what happened with Tesla

I can’t look at this SpaceX situation without thinking about Tesla’s experience in China. Tesla used to dominate the EV market, and Musk once brushed off Chinese competitor BYD with a laugh. Today, BYD has overtaken Tesla in sales, revenue, and likely net income too. China alone sold over 15 million EVs last year compared to Tesla’s 1.5 million globally. The only reason Tesla still holds its ground in America is because of steep tariffs on Chinese EVs, which effectively double the price of a Chinese car if it were sold here.

I genuinely believe SpaceX is walking into a similar trap. In the US, the government will likely restrict American companies from using Chinese reusable rockets, which protects SpaceX domestically. But foreign governments have no reason to follow that same rule. If China’s rockets end up cheaper and reliable, countries outside the US will happily switch over, and SpaceX could find itself losing the global race the same way Tesla lost ground internationally.

What the summer ahead looks like for SpaceX stockholders

So where does that leave anyone currently holding this stock? There are two forces about to collide, and I think the next few weeks are going to be genuinely important for the stock’s direction. On one side, analysts have pointed to July 6 as the likely date SpaceX gets added to the Nasdaq-100 index, and estimates suggest that inclusion could trigger around $8 billion in forced buying from index funds that are required to hold the stock once it joins.

On the other side, the lockup period for early investors and insiders starts releasing shares around the same time.

That means a wave of people who have been waiting years to finally cash out their shares are about to get their chance, right as passive index buying is also happening. It’s a genuine tug of war between mechanical demand and real sellers looking to take profits or cut losses.

Interestingly, not everyone is running for the exits. Cathie Wood’s ARK Invest actually used the June 22 crash as a buying opportunity, adding over 210,000 shares worth about $32.5 million across its ETFs. So clearly there are still investors who believe the long-term story is intact, even with all this volatility.

The next real test comes with SpaceX’s first earnings report as a public company, expected in late July or early August. That report is going to tell us whether the revenue growth investors were promised during IPO week is actually showing up in the numbers, or whether this really was priced for a future that’s still years away.

My personal takeaway

If you ask me, I don’t think SpaceX is going away, and I don’t think the technology story is fake. Reusable rockets are real, Starlink is real, and the engineering behind this company is genuinely impressive. But the valuation the market slapped on it during IPO week was never realistic, and I think we’re just watching the slow process of that price catching up with reality.

Between the massive AI spending, the negative cash flow projected all the way to 2029, and China closing the reusable rocket gap faster than most people expected, I wouldn’t be surprised to see this stock keep drifting lower before it finds a floor that actually makes sense.

What do you think? Are you holding SpaceX stock through this, or did the crash scare you off? I’d love to hear your take in the comments below, and if you found this breakdown useful, share it with someone who’s been asking you what’s going on with this stock lately.

Reference

SpaceX’s $600 billion wipeout tests investor patience — TheStreet