SpaceX Stock Sinks Below IPO Even as Pentagon Awards $4.2 Billion Contract

SpaceX shares fell 5.39% after a Starship test abort, erasing gains from a $4.16B Space Force contract. The stock now trades below its IPO price, down 44% from its all-time high amid broader tech headwinds.

The disconnect between SpaceX’s operational momentum and its stock performance has rarely been starker. On Thursday, the US Space Force handed the company a $4.16 billion contract to build a satellite network for airspace surveillance. The following day, shares plunged 5.39% to €108.40, dragging the stock below its June IPO price of $135 for the first time. Over the past week, the equity has shed 14.78%, and the 30-day slide stands at a punishing 34.80%.

The defense deal, part of the Pentagon’s Golden Dome missile-defense initiative, calls for SpaceX to develop the Space-Based Advanced Moving Target Indicator System (SB-AMTI). This “system of systems” will link orbital sensors, encrypted communications links, and ground stations into a continuous surveillance web capable of tracking aircraft, cruise missiles, and drones from space. The first operational constellation is expected by 2028. Earlier in the week, the company also launched 21 communications satellites for the Space Development Agency’s Tranche 1 transport layer, which relays targeting data between military units in low-Earth orbit. The SDA’s data-relay constellation is now roughly half complete. Starlink, meanwhile, unveiled a lightweight V5 terminal weighing just 1.1 kg with a power draw of 35–50 watts, designed for off-grid use.

Yet none of that prevented a rout. The catalyst came from South Texas, where SpaceX’s Starship rocket aborted its 13th test flight seconds before liftoff on Thursday. Elon Musk confirmed via X that multiple engines failed to ignite, triggering an automatic safety shutdown. The aborted launch, combined with broader headwinds — a cooling tech sector and uncertainty over US interest-rate policy — sent shares careening. The stock now trades just above its 52-week low of €107.34, set the previous day. From the all-time high of €194.46 reached on June 16, the decline amounts to 44.26%. The relative strength index sits at 34.6, signalling oversold conditions, while the annualised 30-day volatility of 93.16% underscores frayed investor nerves.

The $85.7 billion raised in the June IPO initially catapulted the company’s market capitalisation above $2 trillion. That peak now looks distant: the current market cap is roughly €1.56 trillion, more than a trillion dollars below the mid-June zenith. The Starship abort is particularly costly given the vehicle’s strategic importance. SpaceX has poured over $15 billion into the programme, which is intended to accelerate Starlink deployment and eventually carry thousands of AI-focused satellites into orbit. The company’s iterative test philosophy tolerates setbacks, but markets are proving less forgiving.

Competitive pressure is also mounting. Beijing recently claimed its first successful controlled recovery of an orbital rocket stage, a milestone in reusable rocketry that directly challenges SpaceX’s technological edge. For a stock already priced for high growth, such developments compound the anxiety.

SpaceX has already scheduled a second attempt for Monday, July 20. Whether that test succeeds — or whether the sell-off deepens as the lock-up period for early investors approaches — will determine if the current slide is a buying opportunity or the beginning of a longer correction. The gap between the company’s operational wins and its market punishment leaves traders watching the skies and the order book with equal intensity.