A week ago, Yahoo Finance’s Julie Hyman said SpaceX (NASDAQ:SPCX) shareholders were being “called upon to believe as never before.” On Wednesday, faith wavered.

Elon Musk’s rocket and satellite company broke below its $135 IPO price for the first time, falling as much as 2.9% to $132.15 barely a month after the largest public offering in history, according to Bloomberg. Shares have now retreated roughly 40% from their June 16 record high of $225.64.

Shareholders Asked To Believe As Never Before

Hyman, who said last week she has long called investing in Musk’s ventures “faith-based,” described the stock as entering its post-honeymoon phase.

The Future Fund’s Gary Black was blunter Wednesday, saying he is “still not sure what people see” in the stock. Black noted SpaceX trades at roughly 47 times projected 2026 revenue and may not turn profitable until 2027.

Morgan Stanley, which rates the stock overweight with a $300 target, forecasts SpaceX will need roughly $84 billion in external capital annually from 2027 through 2034 and won’t generate positive free cash flow before 2035.

Index Funds Bought, Short Sellers Pounced

SpaceX was fast-tracked into the Nasdaq 100 after just 15 trading days, forced buying that Bloomberg Intelligence estimated at over $5.4 billion from passive funds.

That flow is now spent, and short sellers saw the reversal coming. Bearish bets built remarkably fast in late June, with Ortex data showing short interest reportedly reaching roughly 31% of the free float by month-end.

Wall Street Targets Clash With Market Odds

The next test arrives with second-quarter earnings next month, when roughly 20% of pre-IPO shares become eligible for sale. Black estimates staggered unlocks could expand the tradable float by about 900% by early September.

Polymarket traders bet against SpaceX holding above its IPO price back in June, weeks before Wednesday’s break. Traders currently price a 57% chance SPCX ends the month with a market cap of between $1.5 trillion and $2 trillion. It’s currently worth $1.78 trillion.

Analysts remain largely unmoved, with more than 80% rating the stock a buy and an average target near $238, implying roughly 78% upside. Raymond James holds a Street-high $800.

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