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SpaceX shares drop sharply after IPO amid IPO-hype concerns
A prior Edward Jones analysis found newly minted tech IPO stocks averaged a 14% decline from IPO price six months later between 2011 and 2020.
Space Exploration Technologies, the company commonly known as SpaceX, has traded well below its IPO levels since its mid-June listing, according to an article from Yahoo Finance. The piece notes the stock is down 15% from the IPO’s initial price and more than 30% below its post-IPO peak, suggesting investor disappointment as post-listing momentum fades.
The article argues that like many major IPOs over recent decades, the company’s debut was buoyed by hype that may not have translated into sustained performance. It also points to lock-up expirations as a possible factor, saying the remaining lockup period has limited some early shareholders from selling, which could increase selling pressure after restrictions end.
To frame how newly public technology companies tend to perform, Yahoo Finance cites Edward Jones data covering 2011 to 2020, when it says the average newly minted technology stock fell 14% from its IPO price six months after going public. The article also references Nasdaq Economic Research, saying newly public companies with more than $100 million in annual revenue have, on average, been able to keep pace with broad market gains over longer windows, though nearly two-thirds were still down three years after their IPO.
Yahoo Finance adds that while average multi-year performance has been positive, results were skewed by a small number of strong performers, and it highlights that not all IPO stories play out favorably for investors. It concludes that the Motley Fool’s Stock Advisor team, in this instance, did not include Space Exploration Technologies among its selected 10 best stocks to buy now.
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