Investment firm Creative Planning‘s Chief Market Strategist Charlie Bilello says that Space Exploration Technologies Corp.‘s (NASDAQ:SPCX) decline shows the stock is suffering from a reality check many IPOs go through.
A Great Company Getting a Reality Check
In a post on X on Sunday, Bilello said that SpaceX was “suffering the same fate as so many major IPOs,” which was a “euphoric debut,” followed by “unrealistic expectations, and a painful reality check,” the strategist said.
He added that the takeaway from SpaceX’s decline was that “great companies can still be bad investments at the wrong price,” he said. “Don’t chase,” Bilello added.
Bilello also shared a link to a YouTube video where he talked more about the IPO, saying that the “excitement” around a stock peaked during the initial days of trading, but warned that the next week was the first test for SpaceX because “the insiders and early investors at SpaceX have not been allowed to sell yet,” which will change following SpaceX’s earnings call, he said.
Bilello also hailed the S&P 500’s decision to not change its rules and incorporate SpaceX into its index. “Thus far, it’s been the right call to not change their rules because SpaceX is not a profitable company yet,” he said.
Analyst Dismisses SpaceX’s Governance Concerns
Jeffries analyst Aniket Shah said that critics of SpaceX’s governance structure, which sees billionaire Musk step in as both the company’s CEO and chair, as well as controlling roughly 80% of the company’s voting power, were “too simple-minded.”
He said that the commercial space flight giant’s recent decline had less to do with governance issues, but rather the market "reevaluating general views on AI."
SpaceX has declined roughly 52% since its post-IPO high of around $225/share and currently trades for well below its IPO price of $135/share on the NASDAQ.
Benzinga Edge Rankings show SpaceX fails to provide a favorable price trend in the Short, Medium and Long term.
Price Action: SpaceX shares were up 0.06% at $108.44 during the pre-market trading session on Monday.
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