SpaceX stock erases over $1.2 trillion in value

Investing.com -- SpaceX stock continued lower on Tuesday, trading over 5.5% lower to roughly $107 around 10 a.m. in New York. The decline has erased more than $1.2 trillion in market value from the June 16 high, marking one of the largest market capitalization losses in history.

The stock now trades 47% below its June 16 closing high. Space Exploration Technologies Corp., as the company is formally known, went public last month in what was described as a record-setting debut for Elon Musk's rocket, satellite and artificial intelligence company.

Several factors are weighing on the stock. A volatile geopolitical environment and concerns about spending levels supporting demand and valuations in the AI sector have pressured many large technology companies in recent weeks.

Short sellers have targeted SpaceX, with roughly 30% of currently available shares being sold short, according to data from S3 Partners. These bearish positions have generated nearly $8 billion in paper profits.

The company faces a staggered lock-up arrangement that will release 911.5 million shares for trading on August 6. By the end of the year, the number of shares available to trade will increase to 5.33 billion from around 639 million currently, according to the initial public offering prospectus.

SpaceX successfully tested its Starship rocket on Friday, deploying upgraded satellites for its Starlink communications network and returning to Earth largely intact. Starship is central to Musk's plans to expand the Starlink network, send humans to the moon and place data centers in space.

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