Elon Musk became the world’s first trillionaire earlier this month when SpaceX made its long-awaited debut on the New York Stock Exchange. Less than two weeks later, a brutal tech selloff has erased a significant portion of those gains, pushing his net worth back below the trillion-dollar mark and raising serious questions about SpaceX’s valuation, its AI spending ambitions, and what happens when the most crowded trade in global markets starts to unwind.
From Historic IPO to Sharp Reversal: What Happened
SpaceX raised $75 billion in what became the most oversubscribed IPO in history, with shares priced at $150 when they began trading on June 12. By the end of that first day, the stock had climbed to $161, instantly valuing the company above $2.1 trillion and making it the sixth-largest company in the United States by market capitalization.
Retail investors piled in, drawn by SpaceX’s record-breaking launches, its Starlink satellite internet business, and its boldly stated ambitions around Mars colonization and AI-powered data centers in space. The stock continued rallying after its debut, hitting an intraday peak of $225 on June 16, which pushed SpaceX’s total market value close to $3 trillion and lifted Musk’s personal net worth to an estimated $1.3 trillion.
Then the market turned.
By Tuesday, June 24, SpaceX shares had fallen to around $151.90 at the open, a decline of more than 16% in a single session and more than 30% from the peak set just eight days earlier. Over three trading sessions, more than $600 billion was wiped off SpaceX’s market value. The company’s valuation dropped from nearly $3 trillion to just above $2 trillion.
Musk’s net worth, as tracked by Bloomberg’s Billionaires Index, fell to approximately $957 billion, stripping him of his trillionaire status. Forbes put the single-day loss alone at over $152 billion, while the total drawdown from peak to current levels exceeds $350 billion.
Why SpaceX Shares Fell So Hard
The selloff was not unique to SpaceX. It was part of a broader retreat across technology stocks, but SpaceX’s situation carried several company-specific factors that amplified the damage.
The AI Debt Concern
The immediate trigger for Tuesday’s sharp decline was SpaceX’s announcement that it plans to raise capital through a bond offering, with proceeds intended partly to fund AI development and infrastructure. The news revived a concern that has been building across Wall Street: that major technology companies are financing enormous AI spending through debt, and that the returns on that investment remain far from certain.
Ipek Ozkardeskaya, a senior market analyst at Swissquote Bank, said SpaceX “jumping on the bond train to fund excessive AI and infrastructure spending revives earlier concerns that Big Tech may be spending too much on AI infrastructure and increasingly financing that spending through debt.”
That concern hit particularly hard because SpaceX’s own financial disclosures showed a $4.9 billion net loss in 2025, with its AI segment alone accounting for $12.7 billion in capital expenditures. Investors who had priced the stock for perfection were now confronting a company burning through cash at scale with no clear profitability timeline for its most expensive bets.
The Crowded Trade Problem
Beyond SpaceX-specific concerns, the selloff exposed the structural risk of what analysts describe as an overcrowded trade. Nvidia, Tesla, and Oracle all fell sharply in the same session, suggesting that investors positioned heavily across the same group of AI-linked stocks were exiting simultaneously.
Nigel Green, chief executive of investment adviser deVere Group, explained the dynamic plainly: “The AI trade became one of the most crowded trades in global markets. When everybody owns the same stocks, the exit door becomes very small very quickly.”
When sentiment shifts in a trade that concentrated, selling pressure feeds on itself. SpaceX, having attracted enormous retail and institutional interest during its IPO run-up, was especially exposed.
Questions About the Valuation
Analysts had flagged concerns about SpaceX’s valuation even before the stock peaked. At $225 per share, the company was being priced at roughly $3 trillion, a figure that implied extraordinary future growth across multiple fronts: Starlink subscriber expansion, Mars mission revenue, AI data center contracts, and continued dominance of the commercial launch market.
Some analysts questioned whether the market was pricing in outcomes that were genuinely speculative, from data centers in orbit to a human settlement on Mars within a commercially relevant timeframe.
What Musk’s Portfolio Looks Like Right Now
Despite the dramatic headline numbers, it is worth understanding what Musk’s wealth is actually composed of, because his net worth is almost entirely tied to the performance of two publicly traded companies.
- SpaceX stake: Musk holds approximately 38% of SpaceX, comprising around 4.8 billion shares and 350 million stock options. As of Tuesday, his SpaceX holdings were valued at approximately $744 billion, representing close to 80% of his total net worth.
- Tesla stake: Musk holds roughly 11% of Tesla’s outstanding shares, not counting 424 million restricted shares granted in 2025 as part of a performance-linked CEO compensation package. His Tesla position is currently valued at approximately $158 billion and was also affected by the broader tech selloff.
The concentration of his wealth in two companies, and particularly in SpaceX alone, means that relatively modest percentage moves in the stock create billions in paper gains or losses on a given day. This is not unusual for founders with large undiversified stakes, but it does mean the headline figures should be read as volatile estimates rather than stable measurements.
The Lockup Period: The Next Major Test
One factor that market watchers are monitoring closely is the upcoming expiration of SpaceX’s lockup period. In most IPOs, early investors, employees, and insiders are restricted from selling their shares for a set period after the public offering, typically 90 to 180 days. When that restriction lifts, the market absorbs a new supply of shares from sellers who may have been waiting for the opportunity to take profits.
For SpaceX, whose early backers include venture capital firms that have held stakes for many years at much lower valuations, the lockup expiry could add meaningful selling pressure to an already volatile stock. It represents one of the most closely watched near-term events for the company.
Why This Matters Beyond the Musk Headline
The SpaceX story is a useful case study in several dynamics that affect any investor tracking technology stocks, IPO markets, or concentrated-wealth portfolios.
IPO euphoria and its limits. First-day trading enthusiasm for high-profile IPOs frequently prices stocks beyond what the underlying fundamentals can immediately support. SpaceX’s stock surging 50% in the days after listing, before retreating sharply, follows a well-documented pattern in blockbuster tech listings.
Debt-funded AI spending as a market signal. The market’s reaction to SpaceX’s bond announcement reflects a growing sensitivity to how companies are financing AI buildout. Rising interest rates make debt-funded capital expenditure more expensive to service, and investors are watching whether AI infrastructure spending translates into revenue at the pace required to justify the cost.
Concentration risk for retail investors. Investors who bought SpaceX shares near the peak, attracted by the Musk brand and the company’s dramatic narrative, are now sitting on losses of 30% or more in under two weeks. This is a reminder of the risk that comes with entering a high-profile stock after a parabolic run-up.
What Comes Next for SpaceX
SpaceX remains by far the most valuable company Musk controls, and the core business, launching satellites and cargo, is genuinely profitable. Starlink continues to grow its subscriber base globally, and the company holds a commanding position in the commercial launch market with no near-term competitor at an equivalent scale.
The questions facing the stock now are largely about the premium investors are willing to pay above that baseline. Whether SpaceX can justify a valuation in the trillions depends on delivering on ambitions that are still years or decades from generating meaningful revenue.
Market fluctuations of this magnitude are not unusual for newly listed high-growth companies, and a recovery in SpaceX shares is entirely plausible if sentiment toward AI spending stabilizes and the company demonstrates progress toward its stated goals. But investors who bought during the peak euphoria phase are unlikely to see those levels again quickly.
