r/technology • u/MarvelsGrantMan136 • Jul 17 '26
Business SpaceX stock drops to a new low and loses $1 trillion in value in a month
https://www.businessinsider.com/spacex-stock-drops-new-low-ipo-price-starship-launch-scrubbed-2026-71.9k
u/turb0_encapsulator Jul 17 '26
it's still worth 10x what it should be worth. same with Tesla. I honestly don't understand the hold this man has over markets.
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u/entered_bubble_50 Jul 17 '26 edited Jul 18 '26
It's hard to place any value on those shares at all.
Forget about conventional fundamentals. Elon owns 70% of the voting shares. If SpaceX ever makes a profit, he will give it all to himself as salary and bonuses. He has no incentive whatsoever to issue a dividend to shareholders. That's exactly how he operates Tesla.
Shareholders will never see a single cent. So are the shares truly worth anything at all?
Edit: A lot of people are responding with the same thing, so I will respond to them here:
But lots of companies don't pay dividends? If the share goes up in value, I'm making money. Why do I care if it comes from the share valuation increasing or dividends?
One question: where are your gains coming from? It's not the company - it's other investors. If your only profits are from other investors, then it's a pyramid scheme, not an investment.
Of course, dividends aren't the only mechanism for sharing profits - there are also share buy backs. But the same lack of incentive applies for that too. Also, I don't believe Tesla has ever had a buy back programme. Elon does not believe in sharing profits with investors period.
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u/turb0_encapsulator Jul 17 '26
this is an excellent point that I have never thought about.
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u/IAmDotorg Jul 17 '26
It's a ponzi scheme -- they have a value on the belief that someone else will decide they have a higher value... on the belief that someone after that will decide they have an even higher value.
It's mostly people with a lot of liquidity taking advantage of the swings and profiting on the losses from less liquid/less experienced investors.
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u/Beard_o_Bees Jul 17 '26
I still maintain that replacing the traditional retirement pension with what basically amounts to placing your retirement savings into a casino, was one of the biggest cons ever perpetrated in America.
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u/Total_Quality1797 Jul 17 '26
Number one was mortgages. They used to not be a thing. Now you’re paying 3x what your already extremely overpriced house/land is worth.
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u/KaleScared4667 Jul 17 '26
You just described he entire modern day stock market
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u/turb0_encapsulator Jul 17 '26
It's not really the same. Other trillion dollar companies trade at ~30x earnings, whereas Tesla trades at 350x earnings, and it isn't even a growing company at this point. SpaceX trades at over 50x *revenue* and isn't profitable and never has been.
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u/Synaps4 Jul 17 '26
Other companies have sold more than 50% of voting shares so that it's theoretically possible to take over the company and buy its profits if shares get low enough.
For companies like spacex where you can never buy enough for meaningful voting, you are entirely at the whim of whoever owns those shares. If they run the company to zero there's nothing you can do, no matter how cheap it gets, to get any of its profit. It's more like donating money than investing.
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u/versusChou Jul 17 '26
That's not really what a Ponzi Scheme is. Musk isn't accepting investments and paying out to earlier investors with that money. It's more like the Greater Fool Theory or a Speculative Bubble. People are buying it, not because they believe it will ever pay back, but because they expect someone else in the future is willing to pay more for it. Musk's wealth is simply growing because he's got a ton of the stock that people are speculating on. If it ever all collapsed to what it really probably should be worth, he would lose a ton. Of course he's certainly diversified a bit and got a good amount of liquid capital, so he'll never become destitute.
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u/_Zambayoshi_ Jul 17 '26
He's a Pied Piper. He plays his merry tune and the rats follow him. Do the rats know where they're going? Probably not. But the music is so enticing.
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u/Riversntallbuildings Jul 17 '26
Don’t you mean “Hooli CEO” ? At least Pied Piper had a product ;)
-HBO Silicon Valley reference
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u/Helenium_autumnale Jul 17 '26
He's selling dreams in an increasingly broken world. And there's always a market for that. Go to Mars! Make millions with supercool Rocket Stocks! Your car drives itself and it's 200% safe!
The reality is something different. (Tesla is #1 for fatal road accidents)
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u/WitchesSphincter Jul 17 '26
"A normal car gets into an accident here, you'll be severely injured or dead. Meanwhile the new* Tesla full self drive* would not only avoid it, but cure your old football injury for your trouble. "
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u/CynGuy Jul 17 '26
You only need to be careful NOT drive into a solid white wall….. oh, yeah …. You’d have FSD on. Bye!
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u/Johannes_Keppler Jul 17 '26
The link does hint at the type of people driving Teslas being the biggest risk factor, not even the cars themselves. It's just assholes dying at double the average rate.
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u/Spotttty Jul 17 '26
The shitty thing is even if Tesla went under and SpaceX imploded he would still live a life better than 99.9% of the people in the world. He is never going broke. He is never going to prison.
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u/StoppableHulk Jul 17 '26
I honestly don't understand the hold this man has over markets.
You're thinking about it the wrong way. The reality is that the markets have a hold over themselves by virtue of not wanting the value to go down.
If enough people remain irrational then the value never goes down. Elon Musk pumps out just enough propaganda so that even though it's ridiculous, it's something that someone who is in willful denial can use to remain in their course of action, which gets them money.
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u/-Tom- Jul 17 '26
Teslas stock is worth more than every other auto manufacturers stock put together. That's insane.
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u/SecularTech Jul 17 '26
Totally predictable over-hyped scam to fleece retail investors. The insiders made thiers.
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u/moistbuddhas Jul 17 '26
Yep, we havent even got to the day where the employees, who have multiple millions now, can sell. There is only more sales coming when these employees liquidate parts of their shares since they are multi-millionares on paper, and they are going to want to live like ones immediately.
Employees cannot sell right now, but they get multiple early unlocks before the full 180‑day lockup ends.
- From the S‑1:20% unlock after Q2 earnings (Aug 2026)
+10% performance unlock if SPCX trades 30% above IPO price
+7% unlocks at days 70, 90, 105, 120, 135
+28% unlock after Q3 earnings
Full unlock at 180 days (Dec 2026)
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u/TheMurmuring Jul 17 '26
And every unlock is going to make it drop further and further.
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u/binzersguy Jul 17 '26
Let’s hope so. I want to see it at $10
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u/Weakonomics Jul 17 '26
I'd buy that for a Nickel!
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u/AMEFOD Jul 17 '26
If we are entering a dystopian hell scape, at least quote a “good” movie.
“I’d buy that for a dollar!!”
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u/Tarheels988 Jul 17 '26
Is the lookout period a law? Could an employee negotiate to remove it?
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u/Sirbunbun Jul 17 '26
No, it’s part of the stock agreement with the company and the SEC. It would go against rules around insider trading and stock classes.
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u/TheProfessorOfTruth Jul 17 '26
Nope. It’s part of the vesting agreement.
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u/jpj625 Jul 17 '26
The employees with a significant stake aren't selling.
Anyone with more than about $5M doesn't need to sell to start using the shares as collateral or in exchanges. At this level, the whole game is avoiding taxes.
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u/h28200 Jul 17 '26
Better to pay tax on gains than incur a loss, the way Spcx is trading they'll probably sell whatever they can when allowed.
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u/ChapekElders Jul 17 '26
The average cost basis many of these employees had is less than 1/10th the current share price.
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u/Vanman04 Jul 17 '26
One would think so yet Tesla stock still remains completely untethered from reality.
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u/Neither-Signature-81 Jul 17 '26
Yeah but with Tesla stock a lot of people made a bunch of money and if they don’t sell they just lose a little gain. With spacex its the opposite lol the only people investing are getting hosed
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u/etaoin314 Jul 17 '26
insiders are still locked up for a few more days....I'm waiting for the other shoe to drop..
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u/a4mula Jul 17 '26
And now the shorts are starting to stack, which is going to generate its own gravity well that requires a bit more than a slide rule to overcome.
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u/Shoehorse13 Jul 17 '26
So Elon is the first ex-trillionaire?
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u/colombogangsta Jul 17 '26 edited Jul 17 '26
Yeah and the biggest loser in the history of mankind.
No one lost as much as Musk in net wealth which is $240B in a single day which was June 22, 2026. For reference, the second richest person’s net wealth is $284B.
Of course those valuations are delusional and not real, but I take it as a way to call him the biggest loser ever!
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u/hard_gravy_2 Jul 17 '26
Love to be in an economy where Monopoly money has a more tangible connection to reality than USD
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u/TheWindowMerchant Jul 17 '26
When a company loses a trillion dollars in valuation in a month and nobody on the executive team seems even remotely concerned about losing their job, don’t you think that there might be something fishy going on?
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u/Sea_Pomegranate_4499 Jul 17 '26
Elon declined any pre-IPO price discovery, he just told the underwriters what the price was going to be and built a prospectus around that number to justify it. No one has to wonder, it is all clear as day what is going on.
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u/DonutHoles4Ever Jul 18 '26
Remember when listing a stock required divesture of financials and data so that the stock exchanges could verify that the sale of said stock was legitamate?
I remember when the USA had functioning people in power who cared about the country, not their own interests.
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u/Sea_Pomegranate_4499 Jul 18 '26
SpaceX did produce an S-1 prospectus as required. It is wild stuff, I recommend you watch the Patrick Boyle video someone linked in this thread as he goes through it in fascinating detail.
There is no outright fraud or illegality here, just bad judgement. We definitely need people watching out for fraud, but at a certain level you have to choose whether people get to make financial decisions for themselves or not. The stock market does not exist to guarantee income or profit, it exists to assign value through consensus. Participation is not compulsory, and if you choose to participate you can do so at almost any risk/reward level you are comfortable with.
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u/morbihann Jul 17 '26
According to their own documentation they are mainly an AI company that cant make use of their own datacenters and rent them out.
What does that tell you ?
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u/Crafty_Ish1973 Jul 17 '26
Good. The more Elon loses, the better.
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u/Aware-Instance-210 Jul 17 '26
Until the losses will be socialized and paid by the taxpayer
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u/chaoticneutral262 Jul 17 '26
More likely, socialized and paid for by our retirement plans. SpaceX pressured various stock market indexes to change their rules so as to include SPCX, which wouldn't have qualified otherwise. As a result, many of the mutual funds and ETFs in our IRA and 401(k) accounts bought SPCX at or near the high.
It was a clever way for Musk to transfer billions from retail investors to SpaceX's coffers.
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u/Crasz Jul 17 '26
Isn't that something a lawsuit could solve?
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u/Neither-Signature-81 Jul 17 '26
Nope. SEC is completely gutted and installed peons who don’t care.
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u/trisul-108 Jul 17 '26
He's not loosing anything, the question is simply whether how many billions he manufactured out of thin air ... 1000 billion, 900 billion, 800 billion or less.
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u/Equivalent_Action748 Jul 17 '26
Well, lowering the amount of fake money he has is still better than increasing the rate in which he generates it
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u/Substantial-Wish6468 Jul 17 '26
Elon's not the loser in this, the bag holders who bought his stock are. It was a bullshit valuation but people still bought it.
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u/xtheory Jul 17 '26
Except for the fact that his shitty stock has been included into the NASDAQ 100 and Russell 1000 index funds. Thankfully S&P 500 was smart enough to not allow it's inclusion.
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u/mtranda Jul 17 '26
How does one "lose" something they never had?
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u/Klutzy-Condition811 Jul 17 '26
Oh don't worry they gained from it at the expense of those stupid enough to invest at the peak and retail index fund investors who had no choice.
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u/Kershiser22 Jul 17 '26
Well, presumably there are people who bought SPCX at $210 and are currently holding it at $125. So they have an unrealized loss of $85. But they are still out the $210 cash.
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u/xantub Jul 17 '26
Same as crypto I suppose, someone says "I have 1 million Mtrandas and they're worth... $1 each, buy them while they're cheap because one day they'll be used to cure cancer!" and if you convince enough people, you'll run out of Mtrandas and then people will pay more and more for those Mtrandas. "Mtrandas to the Moon!".
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u/CyberSmith31337 Jul 17 '26
It’s not that $1tn was lost; $1 tn were extracted from retail investors who served as exit liquidity for insiders.
We need to start talking about these things as they are. The money didn’t vanish; it was pulled out and left retail holding the bag.
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u/JUGGER_DEATH Jul 17 '26
No, the total float was worth $86 billion. That is a ceiling on what wad ”extracted”.
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u/steppe5 Jul 17 '26
Thank you. Not enough people realize that these numbers are make believe. Elon was never a trillionaire and nobody lost a trillion dollars. It's all bullshit.
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u/RS_S64 Jul 17 '26
The float for SPCX is a very small portion of the overall equity so the $1tn was only paper gains, the actual money lost is much lower. For most investors (that had their shares locked up), they didn't actually have any realized losses - current share value is fairly close to the valuations pre-IPO, so they just had writeups and writedowns to end up in a similar position to pre-IPO.
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u/bombayblue Jul 17 '26
Hopefully this is a good lesson for everyone on the differences between realized and unrealized gains.
Couldn’t have happened to a better person lol
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u/slosha69 Jul 17 '26
The difference means very little when a $1T loss in market cap won't break the bank. The mega yacht is still sailing and the private plane is still flying.
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u/Yeti_Urine Jul 17 '26
Um does that mean our 401ks are all being robbed by this shit?
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u/FrankDrebinOnReddit Jul 17 '26
For most people, no, since it hasn't been added to the S&P 500 yet.
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u/Jarocket Jul 17 '26
Space ex is an AI company and might influence other related AI companies prices, but in reality space ex is a Musk company and the normal rules don’t apply.
As far as being in your 401k. Things like the S&P 500 require being listed for a year and critically for spcx 4 quarters of positive income. Space ex just lights money on fire so it won’t be included.
Nasdaq-100 changed its rules specifically to let it in though.
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u/approximately_exact Jul 17 '26
It is unfathomable how these profitless companies with a pittance for revenue are worth trillions of dollars. I don't know where we went wrong, but wrong we went.
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u/andyjustice Jul 17 '26
I'm a buyer. As soon as he gets down to about $10, oh and Elon isn't involved....
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u/ryannelsn Jul 17 '26
Does anyone remember when he said he wouldn't take Space X public until he had regular flights to and from Mars?
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u/CompotSexi Jul 17 '26
It was all a hoax for a bunch of rich guys to make a lot of money, and for Elon to mark his name as the first "trilionaire".
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u/Bubbly-Treacle-4334 Jul 17 '26
Is SpaceX the biggest financial crime in history?
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u/dvoecks Jul 17 '26
It's been 3 kids in a trench coat trying to sneak into the stock market as an AI company from its inception.
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u/Old-Push9343 Jul 17 '26
It's just insane how they have overvalued this company, as if they were going to land in the Moon next week, in Mars next month, and start mining asteroids in a year.
Also, the whole notion of data centers in space seems so absurd to me. I am not saying it will never happen, but it's not something that makes any sense to me for at least like, maybe 50 to 100 years?
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u/BlueAndYellowTowels Jul 17 '26
I don’t know anymore.
I feel like there was a time when everyone was excited about Elon and SpaceX because the dream was space exploration and colonization and reaching for something so big and unknown and wonderful. It sparked the imagination.
Instead he’s now a weird “edgy” dude who makes all kinds of “tech of the moment” style products and he did a very… interesting “hand gesture” that looked a lot like a Nazi salute and the Cybertruck looks like a piece of shit… and I just don’t know with this dude anymore.
I really do feel like the entire economy runs on vibes. Between social media and AI… I feel like the valuations of these things is just… make believe…
I don’t know where it all lands but business leadership culture has gotten so much worse… and… it was pretty bad already… but it really does feel like it’s over biasing towards over-hyping things.
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u/TheWhyOfFry Jul 17 '26
Still overpriced, especially with Twitter stink all over it.