SpaceX's stock market euphoria comes to a halt: Shares fall 6.7% after surpassing $225

Following a historic stock market debut and three consecutive sessions of strong gains, shares of SpaceX began to fall on Thursday.

Around 6:30 PM GMT, shares of the rocket and satellite company were trading at $178.94, representing a 6.7% for the day, after having lost nearly 10% at times. The company also closed lower on Wednesday.

SpaceX shares, which also position the company as a major player in artificial intelligence, had surpassed $225 on Tuesday, at which point the company temporarily displaced Microsoft as the world’s fourth-most-valuable company.

Analysts await the first quarterly earnings report

According to analysts cited by AFP, this meteoric rise was due to investor enthusiasm for SpaceX’s growth potential, further fueled by the limited number of shares available on the market.

“It’s just a normal pullback after what has been an accelerated run following the IPO,” explained Patrick O’Hare, an analyst at Briefing.com.

The company, which reported a loss of $4.3 billion last year, has a long-term goal of developing data centers in space. However, analysts do not expect it to become profitable in the short term.

The markets are now eagerly awaiting SpaceX’s first quarterly earnings report. “They're going to have to now demonstrate to investors that they're delivering on these high expectations,” O’Hare noted. "And so everyone's going to have to wait for the first earnings report to see if it's matching with what this strong run has suggested it could be."

Stock market anomaly worth more than the market’s wildest dreams

A report by DataTrek Research, an independent market research and stock analysis firm, described SpaceX as an anomaly in the stock market: a company valued at more than $2 trillion despite generating revenue far below that of Microsoft, Amazon, or other companies with similar valuations.

"SpaceX is what investment bankers and equity salespeople call a 'dream the dream stock,' an investment with no real comps but plenty of potential, backed by a credible management team with a preliminary but very visible track record of success,” noted DataTrek. “It is worth whatever the market wants to believe, and its valuation is not constrained by recent financial performance.”