The stock dropped to as low as $132.28 during trading, falling below its IPO price of $135 before recovering slightly to close at $135.27, according to Reuters.

The decline comes after SpaceX briefly reached a market valuation of more than $2.6 trillion following its IPO, surpassing technology giants Microsoft and Amazon and making CEO Elon Musk the world’s first trillionaire on paper.

Wednesday’s drop means investors who bought shares at the IPO are now facing paper losses for the first time since the company’s market debut.

Analysts attributed the decline to a combination of profit-taking, concerns over the company’s lofty valuation and broader pressure on technology stocks amid rising worries about debt-financed artificial intelligence investments and the possibility of further U.S. interest rate increases.

Justus Parmar, Chief Executive Officer of Fortuna Investments, said investors seeking to cash out after the stock’s strong debut were adding pressure on the share price.

“I think the elephant in the room is there’s a lot of folks that are in the stock and maybe some of them or a good number of them are wanting to take some liquidity, which is essentially putting a lot of pressure on the stock,” he said, adding that the trend could continue through the rest of the year.

Steve Sosnick, Chief Market Strategist at Interactive Brokers, said the stock had also lost momentum due to a lack of new developments to sustain investor enthusiasm.

“There hasn’t been anything lately to remind people of some of the catalysts for why they bought SpaceX,” Sosnick said.

He noted that while falling below the IPO price was not unusual, SpaceX remains one of the world’s most closely watched technology companies, making its share performance particularly significant to investors.

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The drop reduced Musk’s fortune from about $1.4 trillion on June 16 to approximately $1.1 trillion as of Tuesday, after a sustained selloff wiped nearly $1 trillion from SpaceX’s market value.

SpaceX shares fell 16% on June 22, extending losses from their post-IPO peak to more than 30%. The decline pushed the company’s valuation from nearly $3 trillion to around $2 trillion, causing it to slip from the world’s fourth most valuable listed company to seventh place globally.

Musk, who owns roughly 38% of SpaceX through shares and stock options, has been particularly affected by the downturn. Forbes estimates that Monday’s trading session alone erased more than $152 billion from his personal fortune.

The company’s stock had surged in the days following its IPO, rising nearly 67% above its listing price of $135 per share and briefly trading around $225. Investor enthusiasm over SpaceX’s space, satellite and artificial intelligence businesses had propelled the company to record valuations before the recent correction.

Since peaking on June 16, SpaceX has lost an estimated $928 billion in market capitalization, marking one of the fastest declines in paper wealth recorded in stock market history.

Analysts have attributed the selloff to concerns over SpaceX’s valuation, governance structure and broader weakness across technology stocks. Some investors have questioned Musk’s level of control over the company, while sustainability concerns also weighed on sentiment after reports that MSCI assigned SpaceX a CCC rating, the lowest on its sustainability scale.

Investor confidence was further affected after SpaceX disclosed plans to issue bonds to refinance a short-term loan, opting to raise debt instead of issuing additional shares.

The decline comes amid broader weakness in the technology sector, with major technology stocks and chipmakers also facing selling pressure.

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The company said the acquisition is expected to close during the third quarter of 2026.

The deal comes less than two months after SpaceX announced a strategic partnership with Cursor and days after the aerospace company completed its historic IPO.

Cursor, founded in 2022 as Anysphere, has emerged as one of the fastest-growing AI coding platforms. Before the acquisition agreement, the company was reportedly preparing a funding round that would have valued it at approximately $50 billion.

SpaceX said the acquisition will strengthen its AI division, which is built around xAI, Elon Musk’s artificial intelligence company that merged with SpaceX earlier this year.

The acquisition also comes amid efforts to rebuild xAI following a series of controversies involving its Grok chatbot and the departure of several senior executives.

SpaceX has identified artificial intelligence as a major component of its long-term growth strategy. In IPO filings, the company estimated its potential AI-related market opportunity at approximately $26 trillion, including infrastructure and enterprise software applications.

Since its public listing last week, SpaceX shares have risen sharply, increasing the company’s market valuation significantly and providing additional financial flexibility for large acquisitions.

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The company priced 555.6 million shares at $135 each, surpassing the previous record set by Saudi Aramco, which raised $24.9 billion during its 2019 stock market debut.

The company will trade on the Nasdaq under the ticker symbol SPCX.

According to SpaceX, investor demand significantly exceeded available shares, with reports indicating the offering attracted interest far above the amount available for purchase. Underwriters also retain the option to release an additional 83.3 million shares, which could raise a further $11 billion.

The historic listing is expected to substantially increase the wealth of founder Elon Musk, while delivering significant gains for early investors, executives, and venture capital firms that backed the company during its years as a private enterprise.

Despite strong investor enthusiasm, analysts note that questions remain about how the company will justify its valuation over the long term as it continues to pursue ambitious projects, including reusable rocket systems, satellite networks, and future Mars colonisation plans.

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According to reports, the company plans to offer 555.6 million shares at a fixed price of $135 each, giving it a target valuation of approximately $1.75 trillion when it lists on the Nasdaq under the ticker symbol SPCX.

The proposed listing is expected to begin trading on June 12 following a roadshow scheduled to start this week.

The IPO will be structured as an all-primary offering, meaning all proceeds will go directly to the company rather than existing shareholders. Founder Elon Musk and other current investors will not be permitted to sell shares as part of the offering.

SpaceX plans to use the funds to expand its artificial intelligence computing infrastructure and grow its Starlink satellite internet business, currently the company’s only profitable segment.

The company is also banking on future growth opportunities linked to space-based data centres and long-term Mars exploration ambitions.

Industry analysts note that the proposed valuation significantly exceeds some independent estimates, highlighting investor optimism about SpaceX’s future prospects despite ongoing losses in several business divisions.

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The deal includes an option for SpaceX to acquire Cursor for up to $60 billion later this year, according to a company statement.

Under the agreement, Cursor will contribute its developer-focused platform, while SpaceX will provide computing infrastructure through its Colossus supercomputer, which the company claims delivers massive processing power.

SpaceX said it may either pay Cursor $10 billion for its work or proceed with a full acquisition, depending on how the collaboration evolves.

The move comes amid growing competition in AI-driven coding tools, with major players such as OpenAI and Anthropic also expanding into the developer ecosystem.

Industry observers say the partnership reflects broader efforts by tech firms to integrate AI capabilities across their operations, particularly ahead of potential public offerings and large-scale investments.

Cursor, which has seen its valuation rise sharply in recent months, currently provides developers with access to AI models for coding assistance, including tools from competing AI companies.

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Speaking during an all-hands meeting at xAI on Tuesday evening, Musk told employees that the company would eventually need a lunar facility to produce satellites capable of delivering vast computing power for its artificial intelligence systems. The proposal includes the use of a “mass driver,” a type of electromagnetic catapult, to launch satellites from the moon into orbit.

“You have to go to the moon,” Musk said during the meeting, which was heard by The New York Times. He argued that building AI infrastructure beyond Earth would allow xAI to access more power than its competitors.

The remarks come just days after Musk announced plans to merge xAI with SpaceX, his rocket company, in a move aimed at accelerating the development of space-based data centers. SpaceX is reportedly preparing for an initial public offering that could take place as early as June. A representative for xAI did not respond to a request for comment.

While Musk has long framed Mars as SpaceX’s ultimate destination, his recent public statements suggest a growing emphasis on the moon. Since founding SpaceX in 2002, he has repeatedly said the company’s mission is to make humanity multiplanetary, beginning with a settlement on Mars. However, in recent months he has increasingly described the moon as a strategic steppingstone.

During Tuesday’s meeting, Musk outlined a phased plan: first, building a “self-sustaining city on the moon,” then advancing to Mars, and eventually exploring distant star systems. Two former SpaceX executives told the Times that the moon had historically not been a central focus of the company’s long-term strategy.

Beyond space ambitions, Musk also addressed developments at X, the social media platform formerly known as Twitter, which he merged with xAI last year. He said X currently has about 600 million monthly active users, a figure that could not be independently verified.

Musk said upcoming features, including a digital payments service called X Money and a standalone messaging app, are intended to increase daily engagement. He expressed confidence that the platform could surpass one billion daily active users.

Despite his sweeping projections, Musk has previously made timelines that did not materialize. In 2016, for example, he said SpaceX would send its first cargo mission to Mars by 2018, a goal that remains unmet.

At xAI, Musk signaled that rapid expansion may lead to internal restructuring. He suggested that some early-stage employees may not be suited to the company’s next phase of growth.

“If you’re moving faster than anyone else in any given technology arena, you will be the leader,” Musk said, adding that organizational changes are underway to improve effectiveness at scale.

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In a memo posted to SpaceX’s website, Musk explained that terrestrial data centers require immense power and cooling, and meeting global AI energy needs on Earth would impose hardship on communities and the environment. The merger will consolidate xAI’s AI capabilities, including its Grok chatbot and the X social media platform, with SpaceX’s Starlink satellite network.

The merger brings together two companies facing different challenges: xAI reportedly burns $1 billion per month, while SpaceX generates about 80% of its revenue from Starlink launches. Musk indicated that the plan will involve a constant deployment of satellites, which could create a continuous revenue stream.

While space-based data centers are the stated goal, the companies’ immediate priorities differ. SpaceX is focused on Starship rockets for Moon and Mars missions, while xAI competes in the global AI market against firms like OpenAI and Google. Recent reports note regulatory and ethical scrutiny over Grok’s previous misuse in generating sexualised content.

SpaceX has hinted that it may pursue an IPO later this year, though the impact of the merger on those plans remains unclear.

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According to reports from Bloomberg and Reuters, discussions remain at an early stage, but could eventually result in one or more companies folding into SpaceX. Bloomberg reported that one scenario under consideration would merge SpaceX and Tesla, while another would combine SpaceX with xAI, the artificial intelligence firm that owns Musk’s social media platform X.

Reuters reported that a SpaceX-xAI merger could take place ahead of SpaceX’s planned IPO, potentially bringing together Grok, the X platform, Starlink satellites, and SpaceX’s launch operations under a single corporate structure.

Neither SpaceX nor xAI has publicly commented on the talks. However, recent regulatory filings show that two new corporate entities — K2 Merger Sub Inc. and K2 Merger Sub 2 LLC — were registered in Nevada on January 21, suggesting preparations for multiple merger outcomes.

Analysts say each scenario carries strategic advantages. A SpaceX-xAI merger could support Musk’s ambition to place data centers in space, while a SpaceX-Tesla combination could align Tesla’s energy storage business with space-based computing infrastructure.

The potential consolidation also aligns with Musk’s recent efforts to share resources across his companies. In 2025, SpaceX invested $2 billion in xAI, according to The Wall Street Journal, while Tesla disclosed earlier this week that it had also invested $2 billion in the AI startup.

xAI acquired X last year in a deal valuing xAI at $80 billion and X at $33 billion. SpaceX, founded in 2002, was recently valued at approximately $800 billion during a secondary share sale, making it the most valuable private company in the United States.

The Financial Times previously reported that Musk is targeting a June IPO for SpaceX, though Musk’s timelines have historically been subject to change.

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The deal marks a sharp increase from OpenAI’s $300 billion valuation in March and reflects surging investor confidence in the company behind ChatGPT. The move also places the Microsoft-backed firm ahead of other high-profile startups, including Stripe and Anthropic.

The valuation leap comes as OpenAI pursues an ambitious $500 billion plan to build new data centers, with Samsung recently agreeing to supply chips for the project.

The rapid rise of AI has also fueled warnings of an overheated market. “If the bubble bursts, the economy will pop with it,” a Reuters finance editor wrote this week.

Meanwhile, Musk’s portfolio — including Tesla, SpaceX, and xAI — briefly pushed his net worth above $500 billion, making him, for a short period, the world’s first “half-trillionaire.”

Despite concerns over sustainability, tech investors are betting demand for generative AI will continue to drive valuations higher, positioning OpenAI at the center of the sector’s expansion.

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