SpaceX shed $400 billion in market capitalization on Monday as its stock tumbled more than 16%, erasing all gains since its initial public offering. The decline pushed shares below the closing price on the first day of trading, meaning anyone who bought after the IPO is now underwater on paper.
The sell-off was triggered by a fresh rise in US bond yields, which pressured high-growth and speculative equities across the board. Analysts pointed to the company's elevated valuation relative to earnings as a key vulnerability in the current rate environment.
Shares of other space-related companies also faced headwinds, though no single sector-wide catalyst was cited. The broader tech-heavy indices declined modestly, suggesting the move was largely company-specific despite the macro trigger.
Forward-looking ETFs and related holdings have drawn increased interest from investors seeking indirect exposure at lower price points, according to one advisory note. However, the sharp reversal raises questions about whether the post-IPO rally had overshot fundamentals.