The Tech Download: 'The cult of Elon' — SpaceX investors grapple with volatility amid big swings

SpaceX's debut on the public market has been nothing short of tumultuous, reflecting the often unpredictable nature of stocks tied to high-profile figures. Following a landmark IPO that pushed its stock price up by over 60% from the initial offering price of $135, the company briefly surpassed tech giants Amazon and Microsoft in market capitalization. However, this initial surge was soon met with significant volatility. Investors witnessed daily declines of 5% and 4%, culminating in a steep 16% drop that sent jitters through the market. The fluctuations highlight the inherent drama of a stock driven by narratives rather than traditional earnings metrics. Gil Luria, head of technology research at D.A. Davidson, pointed out that stocks associated with Elon Musk, like SpaceX, often operate outside conventional valuation models. "While most stocks are judged on their earnings comparisons, Musk's ventures are evaluated based on future expectations," he explained. This sentiment is echoed by Viraj Patel, a global macro strategist at Vanda, who noted that SpaceX combines a compelling technological narrative, a visionary outlook, a celebrity founder, and extensive media coverage, creating a magnet for retail investors. In just the first five days of trading, retail investors poured an impressive $405 million into SpaceX shares, marking one of the strongest retail IPO debuts in recent memory. Mike Coop, chief investment officer at Morningstar Wealth, commented on the phenomenon, suggesting that the 'cult of Elon' attracts retail investors and intensifies market volatility, similar to previous trends observed with Tesla. Despite the initial excitement, analysts have raised cautionary flags. Morningstar's analysts previously assessed SpaceX's stock as being overvalued in comparison to its $1.75 trillion target. As the initial euphoria began to fade, the company's financial fundamentals gained prominence, creating what Kyle Rodda from Capital.com described as a market 'hangover.' Musk has been optimistic about future revenue, claiming that SpaceX could reach approximately $1 trillion by 2030, a considerable leap from the $18.7 billion reported in 2025. However, the company also faced substantial losses, posting a net loss of $4.9 billion that year and continuing to struggle in the subsequent quarter. Looking ahead, Coop highlighted two significant challenges for SpaceX: the increasing supply of shares as early investors cash out and the current stock price, which may be too high given the uncertainty surrounding the company's future and ongoing capital requirements. Yet, sentiment around the stock remains cautiously optimistic, even among skeptics. Michael Burry, known for his role in 'The Big Short,' noted that he has no stake in SpaceX and finds the options to short the stock to be prohibitively expensive, despite questioning its near $3 trillion market value. While some short sellers are eyeing the stock, many still hesitate to go against Musk. As SpaceX continues to navigate the complexities of the stock market, investors should brace for more dramatic twists and turns in this ongoing saga.