A failed Starship launch just cost SpaceX over $1 trillion in value

SpaceX’s decision to abort the launch of its Starship rocket over an engine-related problem triggered a sharp fall in the company’s shares on Friday, pushing its market value down by more than $1 trillion from its record high.

SpaceX said another launch attempt would be made within the next few days. The stock dropped as much as 6.9% in early US trading to $122.12 a share before recovering some of its losses.

At that level, the aerospace and artificial intelligence company’s market value stood at $1.61 trillion, down from its high of $2.64 trillion seen at the close of June 16, its third trading session, according to a Bloomberg report. SpaceX, formally named Space Exploration Technologies Corp., is now trading below its IPO price of $135, having surged earlier after what was billed as the largest initial public offering in history.

The setback comes despite a run of positive news for the company this month: SpaceX was added to the Nasdaq-100 Index and received a series of bullish analyst ratings, with the stock currently carrying an average 12-month price target of $235.34.

The weakness in SpaceX shares has also raised concerns about the broader momentum behind artificial intelligence-related IPOs. AI forms a central part of the company’s IPO narrative as it pursues plans to deploy data centres in space, targeting what it estimates to be a total addressable market worth $26.5 trillion.

SpaceX’s founder, Elon Musk, became the world’s first trillionaire on the back of the company. His long history of publicly confronting short sellers continues to make bearish bets on the stock a high-risk strategy, even as short positions have grown since the IPO.

Wikimedia Commons/by Steve Jurvetson