SpaceX sinks below $135 IPO price, threatening Bitcoin liquidation

SpaceX's stock slipping below its $135 IPO price threatens to trigger forced selling of the company's Bitcoin holdings, creating a contagion channel between equity and crypto markets.

SpaceX stock dropped 2% to $132.75 on Wednesday, falling below its $135 IPO price for the first time since its June debut and raising the risk of forced liquidation of the company's Bitcoin holdings.

"The breach of the IPO price raises the narrative that the stock is up on fluff, on speculation, on froth, and not on real fundamentals," Matthew Maley, chief market strategist at Miller Tabak, told Reuters.

The stock has declined 41% from a post-IPO high of $225.64 reached in late June, erasing hundreds of billions in market value from its peak above $2 trillion. SpaceX raised $85.7 billion in its June 12 IPO, the largest in history. Just 4% of total shares trade on the Nasdaq, a small float that has amplified volatility.

The decline pressures SpaceX's balance sheet. The company holds Bitcoin from prior acquisitions and corporate treasury allocations, and a sustained stock slide could force it to liquidate crypto assets to support operations or defend its share price. Such a move would amplify selling pressure on Bitcoin and undermine confidence in corporate Bitcoin treasury strategies at firms including MicroStrategy and Tesla.

SpaceX's Bitcoin exposure stems partly from its February acquisition of xAI, Elon Musk's artificial intelligence startup, in an all-stock transaction. The combined entity spent $7.7 billion on AI-related capital expenditure in the first quarter, about 75% of total capex, according to SEC filings cited by Forbes. The company sees a $28.5 trillion total addressable market, with $26.5 trillion tied to AI.

SpaceX has signed agreements with Google, Anthropic and Nvidia worth tens of billions of dollars for computing infrastructure and plans to deploy orbital data centers as early as 2028. Musk's net worth has fallen to $856.8 billion from a peak of $1.45 trillion shortly after the IPO, according to Forbes. He controls a 38% stake in SpaceX.

Analysts Split as Lockup Looms

Analysts remain broadly bullish, with 80% of 21 analysts rating the stock a buy and a consensus price target of about $247, according to FactSet data cited by Axios. But bearish voices have grown louder. "All we have is hope right now but hope isn't a business strategy," Keith Snyder, a CFRA Research analyst who has a sell rating on the stock, told Business Insider.

The stock faces additional pressure from upcoming lockup expirations, which could increase the public float if insiders choose to sell. SpaceX is also preparing to launch its Starship rocket Thursday, the first test flight since the IPO, carrying execution risk for a vehicle still in development.

For Bitcoin, the risk is twofold. A forced liquidation by SpaceX would add supply to a market already under pressure from macro headwinds. It would also damage the narrative that corporate Bitcoin treasuries are a stable store of value, potentially triggering revaluation at other companies holding the asset on their balance sheets.

This article is for informational purposes only and does not constitute investment advice.