That Didn't Take Long: SpaceX Earned Its First Wall Street Sell Rating Less Than an Hour After Trading Began
The fireworks were flying on June 12, with arguably the most anticipated initial public offering (IPO) of the decade making its debut: Elon Musk's SpaceX (NASDAQ: SPCX) SpaceX displaced oil giant Saudi Aramco as the largest IPO capital raise in history ($75 billion) and closed o
The fireworks were flying on June 12, with arguably the most anticipated initial public offering (IPO) of the decade making its debut: Elon Musk's SpaceX (NASDAQ: SPCX)
SpaceX displaced oil giant Saudi Aramco as the largest IPO capital raise in history ($75 billion) and closed out its first trading session with a market cap of approximately $2.1 trillion. Musk's artificial intelligence (AI) and space economy conglomerate surpassed the likes of Broadcom , Tesla , and Meta Platforms to become the seventh-largest publicly traded company.
Will AI create the world's first trillionaire? Our team just released a report on the one little-known company, called an "Indispensable Monopoly" providing the critical technology Nvidia and Intel both need. Continue »
But this wasn't the only history made on Friday. A little more than 20 minutes after the first SpaceX trade printed on the Nasdaq exchange, it earned its first Wall Street sell rating.
Despite a veritable army of IPO underwriters and historic retail investor buzz, CFRA analyst Keith Snyder christened SpaceX with its first sell rating and a price target of $115. Based on its closing price of $160.95 from its first day as a public company, CFRA's target implies a decline of up to 29%.
Snyder's criticisms of SpaceX focus on execution risks from its space segment and growth uncertainty tied to AI start-up xAI.
Concerning the former, Snyder questioned the development of SpaceX's reusable launch vehicle, Starship. Though Starship is at the heart of reducing launch costs, the capital-intensive and time-sensitive nature of this operating segment leaves it prone to delays and other potential setbacks.
CFRA's note also calls into question the sustainability of xAI's growth trajectory. While SpaceX's prospectus assigned xAI the lion's share of its $28.5 trillion addressable market, Snyder urged caution, as xAI lacks the margins or differentiation to warrant a premium valuation.
