SpaceX (SPCX) fell on Wednesday for the first time since the company went public, breaking a three-session winning streak that had pushed Elon Musk’s rocket and AI venture into the upper tier of the world’s most valuable companies.
The stock shed as much as 5% in the opening hour, trimming a debut rally that had at one point reached roughly 58% above the IPO price. The slide arrived just a day after SpaceX edged past Amazon to become the fifth-most-valuable stock, having briefly climbed above Microsoft during Tuesday’s trading.
The reversal is an early gauge of whether the retail frenzy behind the launch can hold up a valuation that rose almost without interruption. Individual investors had bought more SpaceX stock than any other name on every trading day since the offering, per Vanda Research, a pace of demand that has had few precedents among recent market debuts.
“We’re running out of superlatives to describe retail enthusiasm for SpaceX. SPCX has now topped the leaderboard as the most bought stock by retail investors for 3 consecutive sessions, with yesterday’s $144.6mn of net buying surpassing the first two days of trading,” Vanda Research said in a note published Wednesday. “In total, retail investors have bought $369.8mn of SPCX over the last 3 sessions. To put that into perspective, retail bought just $100mn of QQQ [Nasdaq ETF] and $88.2mn of NVDA over the same period.”
Vanda concludes that SpaceX buying has been “roughly 4x larger” than these two typically “retail favorite” stocks.
It is noteworthy that only about 4.2% of total shares free to trade on day one, meaning the stock’s tiny float amplified its moves up. But a big overhang sits in the not too distant future: as the contracts that bar insider selling begin to lapse over the coming months, a fresh supply of shares could weigh on the price.
In addition, sentiment in the new options market had already started to cool, per Bloomberg. Contracts on SpaceX opened for trading Tuesday on several venues, with well over 1.7 million changing hands.
Bullish call buying dominated early, but by the close puts — the contracts traders use to hedge against or bet on a decline — made up 44% of the flow, hinting that some participants had begun bracing for a drop even as the shares kept rising.
Pras Subramanian is Lead Transportation Reporter for Yahoo Finance. You can follow him on X and on Instagram.
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