Shares of Elon Musk’s SpaceX have been choppy Tuesday following a three-session selloff that wiped out more than US$600 billion from the company’s market value.
As of 10:45 a.m. eastern time, the stock bounced back into the green by 1.6 per cent to about $157.
The rocket and AI company’s shares fell 1.9 per cent to US$151.6 earlier on Tuesday. The stock sank five per cent to as much as $146.88 — dipping below $150, its opening price on the day of its market debut.
SpaceX’s record-breaking IPO fueled a trading frenzy in its first week as a listed company, when it briefly surpassed Microsoft and Amazon in market valuation before retreating. SpaceX last had a market valuation of $1.99 trillion.
“I’d be cautious about seeing this as a second-chance buying opportunity. The drop looks dramatic in scale, but these swings aren’t unusual for a stock with such a small public float,” said Nic Puckrin, cross-asset analyst and founder of Coin Bureau.
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The company’s shares currently stand more than 10 per cent above their IPO price of $135.
Big IPOs often face turbulence in their early days on the public market. A Reuters analysis of 50 IPOs with the highest valuations in the past five years showed investors would have been better off buying an S&P 500 index fund about three-quarters of the time than buying into a big IPO.
SpaceX also announced a bond offering earlier this week.