Barely one month after its Initial Public Offering (IPO), SpaceX’s stock still holds its ground, dispelling weeks of fear of existential threat for another Elon Musk’s company, Tesla Inc. According to market analysts, SpaceX shares were priced at $135 in the biggest initial public offering on June 11, and they opened for trading at $150 on June 12.
While the IPO captivated investors, spurring the stock to soar in its first few sessions, it quickly came tumbling back down on Thursday at $152.16 after dropping below $150 for a couple of sessions. Tesla shares are also up slightly since the IPO.
They opened on June 12 at $399.49, closed that day at $406.43, and now are at $406.55. Meanwhile, traders are actively debating how SpaceX and Tesla would merge to create one gigantic Musk conglomerate. The speculation of some form of merger appears to be preventing the initial concerns about Tesla’s “Musk premium” from hitting its stock price.
Chief strategist at Interactive Brokers, Steve Sosnick was of the view that “SpaceX is a phenomenon strictly because of the Elon Musk halo. “I have long referred to Tesla as a ‘faith-based’ stock, and that faith is well-earned after Musk made huge money for many of his most dedicated believers.”
Some market watchers were however optimistic, noting that investors need not worry about SpaceX’s quiet showing in the market so far. They recall such was Tesla’s case following its IPO 16 years ago, its shares opened for trading at $1.27 on June 29, 2010, and closed same day at $1.59, but traded at around $1.35 a month later.
They’re up almost 30,000 percent since then. Investors hope Musk can repeat or exceed that performance with SpaceX, which was founded more than two decades ago and waited much longer to go public than Tesla did.
Though it’s currently unprofitable, the company has a $2 trillion market capitalisation, which is higher than Tesla’s $1.5 trillion. It would be sixth most valuable company in the S&P 500 if it was a member of the index. Retail traders are still buying SpaceX’s stock, which has yet to see a day of net negative flows, according to Vanda Research data as of Wednesday.
And Wall Street is unflinchingly bullish on the shares. Of the 35 analysts tracked by Bloomberg who follow the company, 29 have buy ratings. The average price target of $236 implies a 55 percent gain over the next 12 months.
“SpaceX represents in our view the apex of civilizational ambition, oftentimes expressed in steel and fire, bending the arc of history to make humans multiplanetary,” Deutsche Bank’s Edison Yu wrote as he initiated coverage with a buy rating and $255 price target.
The issue, however, is SpaceX’s fundamentals don’t come close to justifying its stock price. It’s the same criticism skeptics often lob at Tesla, which trades at more than 180 times projected earnings over the next 12 months, making it the most expensive stock in the S&P 500.
But at least the electric-vehicle maker has earnings — SpaceX lost $4.4 billion in 2025 and is projected to lose another $2.6 billion in 2026. “From a valuation perspective, SpaceX does not make any sense,” said Vikram Rai, portfolio manager and macro trader at First New York. “It’s completely overvalued.”
Of course, Tesla has successfully traded more on hopes and dreams than car sales for years. That’s cutting both ways now, as investors focus more on what might happen between Musk’s two ventures than what’s actually happening inside the companies.
For example, last week Tesla reported record second-quarter vehicle sales but the stock suffered its worst rout in a year. “That price action tells you exactly where the market’s attention is,” said Dmitry Shlyapnikov, an analyst at Horizon Investments.
“Earnings on July 22 will be a near-term test of whether management can show the robotaxi and storage businesses moving from narrative to actual numbers.” Essentially, Tesla is stuck. If SpaceX’s stock outperforms, it gobbles up attention and cash from the companies’ overlapping investor base.
But if it does poorly, that stymies the value of a future combination. “A splashy SpaceX IPO and strong trading have clearly pulled Musk-focused retail and momentum money away from Tesla, yet the same richness in SpaceX’s valuation underpins Tesla’s perceived bailout floor,” said Ivan Feinseth, chief investment officer at Tigress Financial Partners.
