Bearish Investors Give Elon Musk the Boot From Trillionaire Club 

Starships were meant to fly, in the wise words of Nicki Minaj. But SpaceX’s Starship rocket stayed grounded last week as the company’s stock crashed down around CEO Elon Musk. 

Investors were turning bearish on Musk’s space company even before last week’s scrubbed launch, wiping out about $1 trillion in market value since the stock’s June 16 peak. SpaceX’s shares closed out the week trading about $124, below the company’s $135 IPO price last month. Musk, who’s the company’s biggest shareholder with about a 46% stake, saw his net worth plummet below the trillion mark. But don’t start playing a tiny violin just yet: He’s still the world’s richest person. 

Coming Down to Earth

SpaceX’s June 12 IPO was the largest in history, with the moonward-bound company raising more than $85 billion. The stock surged as investors fought over the first public shares of a company that had stayed private for 24 years. But not long after, SpaceX lost its forward thrust:

• Only about 5% of SpaceX’s 13 billion outstanding shares were available for the public to trade at the time of its IPO. Out of its tradeable shares, about 185 million are being sold short, according to S3 Partners, up from just about 40 million a few weeks ago. That means about 29%, or $25 billion worth, of SpaceX’s shares are pinned to bets that the company will keep trending down. 
• It’s a sensitive time for investors to turn sour, with SpaceX floating more of its shares as lockups gradually expire. KeyBanc Capital Markets estimated that the first unlock might be timed alongside the company’s second-quarter earnings call, which hasn’t been scheduled yet. 

It’s a Musk Have: When SpaceX shares its first earnings report as a public company, Musk will be faced with the tall task of carefully framing its continued losses. SpaceX doesn’t expect to turn a profit until 2027. Playing it safe with a focus on the growing Starlink biz, the company’s only profitable unit, might put investors at ease. Still, this is Elon Musk, and he has a track record of driving hype with out-there plans like Tesla’s Optimus robot. So talking about building a civilization on Mars isn’t off the table.