The launch delay compounded the pressure to lift the ban seriously, and the stock price of SpaceX (SPCX.US) evaporated trillion dollars from a high market capitalization

The Zhitong Finance App learned that the SpaceX (SPCX.US) stock price fell sharply on Friday, and the cumulative market value evaporated from the historical high of more than 1 trillion US dollars. The setback in rocket launches, rising valuation pressure, and the subsequent lifting of the ban on restricted stocks in the future are weakening investors' enthusiasm for this space and artificial intelligence giant.

SpaceX shares fell 6.9% in early US trading to $122.12 per share, then the decline narrowed. Based on an intraday low, the company's market capitalization was about $1.61 trillion, a sharp drop from $2.64 trillion at the close of June 16. June 16 is the third trading day since SpaceX went public.

This company, with Tesla (TSLA.US) CEO Musk at the helm and officially known as Space Exploration Technologies Corp., once surged after completing the largest initial public offering in history, but has continued to decline since then, and has now fallen below the IPO price of 135 US dollars per share.

Earlier, SpaceX cancelled the “Starship” rocket launch mission due to engine issues, further dampening market sentiment.

Integrity Asset Management portfolio manager Joe Gilbert said that the timing of this launch failure was not ideal, but the launch failure itself is always a risk you need to face when investing in SpaceX. He pointed out that as market optimism about the space industry gradually cools down, investors are reducing risk exposure and re-evaluating company valuations, putting pressure on high valuation multiples as a result.

SpaceX said that after canceling Thursday's launch mission, the company will try to launch the “Starship” again. Musk later said on social networking platform X that the company will replace two “Raptor” engines, which may delay the next launch until early next week.

Raymond James analyst Brian Gesuale said in a customer report released on Friday that similar anomalies will still be part of the “Starship” aggressive R&D model. SpaceX is continuously challenging the rocket's ability to reuse, payload capacity, and high-frequency launch rhythms to support the deployment of “Starlink V3” and NASA's future “Artemis” missions.

Gesuale pointed out that even if the launch is postponed until next week, the interval between SpaceX's two “Starship” flights is expected to be shortened from 221 days to less than 60 days.

SpaceX was included in the Nasdaq 100 Index earlier this month and received bullish ratings from several Wall Street agencies. Currently, the 12-month average price target given to the stock by analysts is $235.34, which is significantly higher than the current share price.

However, the company is still facing potential selling pressure from insiders due to extended sales restrictions. In the next few months, some restricted shares will enter the market in batches, which may increase stock supply and further affect valuation.

Mark Malek, chief investment officer of Siebert Financial, said that after considering the lifting of the ban on restricted shares in the future, many investors may have re-examined their initial investment logic. Potential buyers who had previously been on the market may continue to wait for lower entry points, as the possibility of lower prices is rising as valuations return to reasonable levels.

The continued decline in SpaceX's stock price may also have an impact on the artificial intelligence-related IPO boom. Artificial intelligence is one of the core topics in SpaceX's listing. The company plans to build a data center in space to gain a dominant position in a potential market estimated at 26.5 trillion US dollars.

SpaceX's record IPO had previously significantly boosted Wall Street equity financing business. In the second quarter, revenue related to stock issuance received by major investment banks through underwriting and advisory services reached the highest level since 2021. However, after SpaceX's listing, the stock price fell below the issue price, which may cause the market to re-evaluate the listing prospects of overvalued technology and artificial intelligence companies.