SpaceX shares lost ground quickly after a highly optimistic round of Wall Street research, falling below the company’s $135 IPO price for the first time and then moving toward $125. The decline came just days after the stock had surged to nearly $211 within three trading days of its Nasdaq debut in June, before giving back close to 60% of that value.
The pullback was especially notable because the analysts’ reports were overwhelmingly positive. According to the article, 18 banks involved in the offering published their views about 25 days after trading began, which is the usual timing for post-IPO research. Of those, five did not issue price targets or ratings, and William Blair offered only an outperform call without a target. The remaining 17 banks all set specific price targets for the next 12 to 18 months, with no neutral or negative outlooks among them.
The target range was wide, but still broadly bullish. Raymond James was the most aggressive at $800, while Stifel was the lowest at $190. The median target across the banks was $225, and four firms chose that exact figure, including J.P. Morgan and Deutsche Bank. Based on the $160 level where the stock closed on July 6, that median implied a gain of 41%. Morgan Stanley stood out with a $300 target, while most of the other estimates were grouped tightly between $200 and $250.
The banks also used unusually enthusiastic language to describe the company’s prospects. Morgan Stanley called SpaceX’s ecosystem “AI’s final frontier,” while Bank of America said the company was “paving the superhighway to the stars.” Raymond James compared the company’s potential impact with major historical shifts such as electrification, railroads and the internet. Still, the article notes that the near-uniformity of the forecasts suggests analysts may have been closely tracking one another rather than reaching sharply independent conclusions.
The SpaceX offering was also a major payday for the underwriting syndicate. The banks collected about $500 million before expenses, equal to a 0.66% fee on the $75 billion raised. The deal involved 23 banks, including major Wall Street firms and some international institutions. Even with the IPO’s record-setting scale and the enthusiastic research that followed, the stock’s early decline showed how quickly market trading can diverge from the expectations set by analysts.
Source: fortune.com
