WEBULL

Why SpaceX Stock Dropped on Friday

The Motley Fool · 1d ago

Key Points

  • SpaceX scubbed its Starship test flight last night.

  • Two of the engines didn't ignite, so SpaceX will replace them and try again in a few days.

Falling below $125 per share today, Space Exploration Technologies (NASDAQ: SPCX) stock is officially a broken IPO now -- trading $10 below the point at which it priced its IPO last month. Investors who missed out on the IPO, therefore, can count themselves lucky they didn't lose money.

SpaceX logo.

Image source: The Motley Fool.

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But why is SpaceX down at all? And specifically, why is it down 4.7% through 12:10 p.m. ET today?

Scrub one launch

The most obvious catalyst is that SpaceX was forced to scrub a planned Starship test flight last night after at least two Raptor engines on the Starship's Super Heavy booster failed to ignite. CEO Elon Musk says those engines will need to be replaced, delaying Starship's "lucky" 13th test flight until early next week.

What it means for SpaceX stock

As reasons for a sell-off go, this one's kind of weak. On the one hand, yes, a lot of SpaceX's hopes and dreams hinge on Musk making Starship a success. The megarocket is the only launch vehicle on Earth capable of carrying Musk's V.2 Mobile and V3 Starlink satellites to orbit. In its Human Landing System form, Starship is also the designated hitter on NASA's plan to return astronauts to the moon.

That said, Starship is a project years in the making. Delaying liftoff by a few more days isn't going to do SpaceX any harm -- certainly not as much harm as trying to fly and failing because the engines didn't work. Long story short:

If you liked SpaceX stock as an investment yesterday, before the launch scrub, there's absolutely no reason to like it any less today.

Rich Smith has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.