SpaceX's stock price is fading its glory in a nearly tragic way.
After the US stock market closed yesterday, its stock price was fixed at $131. For a stock that had an IPO price set at $135 and was once elevated to a pedestal by the market on its first trading day, this number means a significant psychological barrier has been officially breached.
Worse still, it continued to decline in after-hours trading. As of the time of writing, the after-hours stock price had dropped to around $126.
A month ago, SpaceX landed on Nasdaq with a valuation of about $2.5 trillion, carrying the grand narrative of being the "starting point of human interstellar civilization." At that time, the $135 IPO price was crazily sought after, and the price once soared to over $200. Now, it has fallen nearly 40% from its peak, and market sentiment has undergone a 180-degree turnaround.
With $135 breached, voices of "bottom fishing" have started to emerge on social media. So is $135 really the bottom?
1. $135 Is Just the Underwriter's Price, Not the Market's Value Bottom
Many investors treat the $135 IPO price as a kind of "official floor price"—thinking that dropping below this price means it's "cheap." This is a common psychological bias.
The IPO price is a figure negotiated between underwriters and the issuing party; it reflects the equilibrium of supply and demand in the primary market and fundraising needs, rather than the consensus of the company's intrinsic value in the secondary market. The underwriters, Goldman Sachs and Morgan Stanley, will take into account market sentiment, order book heat, and fundraising scale when pricing, but they will not strictly adhere to the fair value derived from the DCF (Discounted Cash Flow) model.
If we calculate a figure for SpaceX using traditional valuation tools, the number would be quite sobering. Based on publicly available information, SpaceX's revenue in 2025 is about $18.7 billion. Placing it in a DCF valuation framework, the fair value would be around $50 to $60 per share.
In other words, the $135 issuing price has already included a significant amount of "narrative premium"—the visions of future Mars colonization, the monopoly of Starlink, and the faith in Elon Musk's personal execution. How much is this narrative worth? No one knows. But it is certain that these are numbers that cannot be calculated by DCF.
$135 is not the bottom. It is just a starting point, a starting point filled with emotional bubbles.
2. Dual Headwinds from News and Fundamentals
Recently, SpaceX has been facing a series of negative catalysts.
The first blow comes from China's space program. Just recently, China successfully achieved rocket recovery landing, which means that the technology of "reusable rockets" is no longer an exclusive moat for SpaceX. When competitors begin to catch up or even approach core technological leadership, the narrative of "technology exclusivity" supporting SpaceX's sky-high valuation inevitably shows cracks.
The second blow comes from launch failures. Today, SpaceX's latest rocket launch mission was aborted in the final countdown stage due to some engines failing to start normally. Although this failure did not result in casualties or equipment damage, it reminded the market once again: space launches are still a high-risk industry, and any technical failure can directly translate into delays in commercial orders and damage to reputation. Following the news, selling in after-hours trading intensified.
Challenges to technical position + launch failures causing trust doubts—these two factors combined are enough for any rational investor to reassess the risk-reward ratio of their holdings.
3. 5% Float + August Unlock: A Sword Hanging Over Your Head
In addition to valuation and news, SpaceX's capital structure also harbors huge risks.
Currently, SpaceX's freely tradable shares account for only about 5% of the total shares outstanding. This figure is extremely low, meaning the number of tradeable stocks in the market is very limited. In the early stages of listing, this low liquidity was amplified by emotion and bullish forces into a booster for soaring prices—a small amount of buying could push prices up. But now the direction has reversed, and the same low liquidity can accelerate the rate of decline—small amounts of selling can crash the price.
Moreover, a more severe test is yet to come: after the company announces its second-quarter financial report in early August, the first batch of lock-up periods will be lifted.
This means that a large number of early private investors—whose holding costs are far below $135—will finally have the eligibility to sell shares in the public market. Consider this: if you are an investor who bought SpaceX in a private round at $50 or even lower, the current stock price of around $130 represents a over 160% paper profit for you. When the unlock window opens, what will be your first impulse?
Of course, it is to cash out.
Buying SpaceX's stock before the unlock is equivalent to actively standing at the forefront of a supply shock, ready to catch the chips thrown by those eager to exit. This is less about investing and more like catching the falling knife.
4. What to Do If You're Already Stuck?
After discussing so many risks, what if the issue is: I have already bought SpaceX's stock, and now I am at a paper loss and don’t want to cut my losses. Is there a way to balance the risk?
The answer is: Yes. If you hold SpaceX's stock but expect there will be further downward space in the short term—especially considering the supply shock of the August unlock—you can short an equal amount of SpaceX shares using BIT's margin trading function.
If the stock drops, the shorting profit offsets the paper loss of the stock.
If the stock rises, the shorting loss occurs, but the stock profit covers it.
As of July 31, BIT's margin trading has a limited-time $0 fee rate, making the shorting cost extremely low.
This is a "market neutral" hedging strategy: you don’t bet on direction, only on volatility. In the high uncertainty window before the unlock, using margin trading to lock in downside risk.
Additionally, BIT will soon launch US stock options functionality. At that time, you can buy put options on SpaceX to purchase "downside insurance" for your stock holdings.
Pay a premium to buy put options with a strike price of $125 or lower.
If SpaceX drops significantly to $110 or lower after the financial report or unlock, the put options will greatly appreciate in value, and the profits can cover or even exceed the losses on the stock.
If SpaceX rebounds, you can let the options expire, and the maximum loss is just the premium paid—compared to the stock's volatility, this "insurance cost" is manageable.
Compared to margin trading, the advantage of options is that the losses are strictly capped. As an option buyer, you won’t face liquidation, won’t be subject to margin calls, and your maximum risk is clear.
5. Final Thoughts
The breach of $135 by SpaceX is not a signal for bottom fishing, but a reminder: valuations driven by emotions and narratives will eventually revert to the gravitational pull of fundamentals.
$135 may not be the bottom, and $126 may also not be. In the structural context of a 5% float, upcoming unlocks in August, and DCF fair values significantly lower than current stock prices, any rush to "bottom fish" carries extremely high risks.
For investors who already hold shares, the rational choice is not to stubbornly hold on but to use tools to manage risk. BIT's margin trading function and the impending options functionality provide two different paths for hedging—margin trading suits traders looking to flexibly adjust exposure, while options are suitable for conservative investors wanting to lock in their losses.
In the story of space travel, the most dangerous phase often occurs when returning through the atmosphere.
Risk Warning: The market conditions, valuation assessments, and product descriptions referenced in this article are for informational purposes only and do not constitute investment advice. Trading US stocks and their derivatives carries market volatility, leverage, and liquidity risks; margin short selling may face unlimited loss risks; options trading carries the possibility of total loss of the premium; past performance does not predict future returns. Investors should make prudent decisions based on their own risk tolerance and consult professional investment advisors when necessary.
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