Crypto users who thought they had found a way into the hottest IPO in years through tokenized SpaceX stock discovered on Friday that the shares would not be arriving. Binance Wallet, Bybit, and Bitget Wallet all canceled their tokenized SpaceX offerings after xStocks, the tokenized equity provider behind all three products, failed to deliver the underlying assets. According to CoinDesk, xStocks and its partners had gathered more than $1 billion in customer orders tied to SpaceX access before the mechanism collapsed.

Bybit had launched the earliest campaign on June 7, introducing SpaceX as the first offering on its IPO Express product and telling users they could “participate in the SpaceX IPO subscription using crypto and gain early access before spot trading begins.” Binance Wallet followed with its own SPCXx campaign on Thursday, describing it as a “non-guaranteed subscription process” through xStocks. Bitget Wallet told users on June 9 that they could “access tokenized stock exposure to SpaceX” through the same provider.

When SpaceX actually went public on Friday, none of the crypto allocations materialised. Bybit told users that “due to the xStocks’ inability to deliver the underlying assets,” it had received no allocation and no subscribed SpaceX shares would be issued. The exchange offered automatic refunds plus a reward calculated at 10 per cent APR over a fixed four-day period. Binance canceled its campaign the same day, refunding all locked USDC and promising to distribute $1 million worth of its own bStocks SpaceX tokens equally among participants by June 18.

The scale of the failed allocation was significant. According to The Defiant, Binance’s SPCXx campaign alone attracted $557 million in on-chain subscriptions across nearly 27,700 addresses before being unwound with nothing distributed. Bitget Wallet also announced full refunds for affected users. Community reports indicated that Kraken customers fared somewhat better, with some subscribers receiving roughly four shares’ worth of tokenized SpaceX exposure, far less than requested but more than zero.

The allocation crunch was not entirely unique to crypto. SpaceX’s $75 billion IPO was more than four times oversubscribed, with approximately $250 billion in total demand. Traditional brokerage customers also received fewer shares than they requested, though Fidelity, Charles Schwab, and SoFi all completed at least partial allocations for eligible participants. The difference is that crypto customers got nothing at all.

The failure exposed a structural problem with how these products were built. Crypto exchanges did not have direct relationships with SpaceX’s underwriters or the IPO allocation process. Instead, they relied on xStocks as an intermediary to secure and deliver the underlying shares, adding an extra link in the chain between the customer and the asset. When that intermediary could not obtain shares from the massively oversubscribed offering, the entire tokenized product collapsed regardless of how much demand the exchanges had aggregated.

Even crypto industry insiders found the arrangement problematic. Tom Farley, CEO of crypto exchange Bullish, posted on X that “maybe tokens should actually be approved by the issuer and therefore be the actual underlying share.” ARK Invest’s Lorenzo Valente had flagged the issue earlier on Friday, posting that he had “seen 40 exchanges and wallets advertising SpaceX stock” and asking, “What exactly am I buying?”

Not every tokenized SpaceX product failed. The xStocks SPCXx token did eventually go live after the IPO, and CoinGecko listed tokenized SpaceX products at a combined market capitalisation of nearly $50 million on the first trading day. That figure is barely a rounding error against SpaceX’s roughly $2.1 trillion public valuation. Meanwhile, PreStocks’ Solana-based SpaceX token was trading at a steep discount to the actual public shares, a gap the issuer had warned about due to a six-month lockup on the underlying shares.

The episode arrived as the SEC had already delayed a plan, reported by Bloomberg in May, to allow crypto firms to trade tokenized versions of US stocks. Tokenized equities are being promoted alongside stablecoins as evidence that crypto is finding mainstream adoption, but the SpaceX debacle demonstrated how much of that adoption still depends on centralised issuers, custodians, and allocation pipelines. The original pitch for Bitcoin was to reduce reliance on trusted financial intermediaries. What happened on Friday was a reminder that tokenized stocks, by their nature, cannot escape them.

SpaceX has captured the attention of media, investors, and the public for years now — interest propelled by the company’s reusable rocket launches, the rise of its Starlink satellite network, and of course, for its founder and CEO Elon Musk.

But in its 24-year history, nothing quite compares to this initial public offering. Everyone seems to be interested, and perhaps it’s because of the sheer size of this IPO. The company priced its 555.6 million shares at $135 each to raise $75 billion, making it the largest IPO in history. At this price, the deal also looks set to make Musk the world’s first trillionaire.

TechCrunch has followed SpaceX’s start, struggles, and successes from the early days. And we’re here for what happens next too. This article will be continually updated with all of the latest SpaceX IPO news.

The latest on the SpaceX IPO

SpaceX shares opened at $150 on the Nasdaq public exchange, an 11% pop for the most anticipated debut in history. And it has continued to rise. The shares keep rising too (which we will update here). In midday trading, SpaceX shares soared 30%.

There has been heavy trading volume, as expected. Robinhood said it has seen “record-breaking traffic on its trading platform in the hours after SpaceX’s historic public markets debut.

SpaceX COO Gwynne Shotwell was interviewed by CNBC on Friday and among the many interesting comments she made, here is one that might get the attention of Tesla shareholders. At one point in the interview, Shotwell said a “merger between SpaceX and Tesla might make Elon’s life a little easier.”

How to track the SpaceX IPO

With an offering this large, there is a lot of financial machinery operating behind the scenes — so the first question is just when the stock makes it to the market to start trading. SpaceX is debuting on Nasdaq and you can see the official Nasdaq listing here, which will have the price of record as soon as there is one. Nasdaq also has video of the SpaceX crew ringing the bell, if that’s your thing.

But the price is just part of the picture. For the most up-to-the-minute information, your best bet is still financial press outlets like Bloomberg and CNBC, both of which have liveblogs running and will have close coverage of any hiccups that happen in getting the stock to market.

The SpaceX IPO, by the numbers

Here we look at some of the bigger numbers, the consequential figures, and the eyewatering amounts that make up the company’s S-1 form. 

For instance, SpaceX lost $4.9 billion on revenues of over $18 billion in 2025. That’s only a fraction of the more than $37 billion lost since SpaceX’s inception. 

As CEO, Elon Musk holds about 85.1% of the company’s voting power. You can read more about that in the next section “Who wins and who doesn’t” — and we’ll continue to drop interesting numbers in here.

Here is another figure that caught our attention… 4,400. That’s the number of SpaceX employees who could become millionaires, according to the NYT.

Elon Musk can’t hear you over the sound of his $1.75 trillion IPO: The Equity podcast weighs in on the IPO.

Who wins and who doesn’t

SpaceX is the world’s largest IPO in history and means a big payday for some investors, employees, and of course, Elon Musk.

Elon Musk becomes the world’s first trillionaire after SpaceX’s historic IPO: The SpaceX IPO has boosted Musk’s paper wealth to more than $1,000,000,000,000 at a time when he is more hated — and powerful — than ever.

How Elon Musk will increase his power through the SpaceX IPO: Musk, who will have more than 50% of the voting power, will have a monarchical grip over the publicly traded version of SpaceX — control that goes far beyond what other tech founders enjoy.

Who will benefit most from SpaceX IPO? Mostly Elon — and a few from his inner circle: Elon Musk has the largest stake in SpaceX by billions of shares, but others also stand to win. Here’s the rundown of who owns what.

SpaceX SPV investors won’t know their true holdings until post-IPO lock-ups lift: After SpaceX makes its public debut, lower-tier SPV investors face hidden fees, lengthy payout delays, and the risk of outright fraud.

What’s in the S-1

The S-1 registration document gave the world an unprecedented look inside SpaceX, including its financials and its various businesses. The S-1 continued to be amended as the IPO date approached, and we were on it. Here is what we found.

The SpaceX IPO filing is filled with AI bets, Starship dreams, and Elon Musk at the center: The contents of the SpaceX IPO details a business dominated by its Starlink satellite internet offering, more than $37 billion in losses, and future business prospects through its xAI division.

Starship’s path to reusability looks murky after SpaceX’s S-1: SpaceX’s IPO and Starship rocket test flight delivered two big data points that offer a realistic vision for the coming years — and one that may disappoint both the company’s boosters and its critics.

SpaceX warns investors of future dilution, adding fuel to Tesla merger rumors: The company added new language to its S-1, a warning to prospective investors that a major dilution could be in the cards after it goes public.

Pre-IPO deals and events

Leading up to the IPO, SpaceX locked in a string of deals, mostly selling off compute to improve its balance sheet.

Anthropic will pay xAI $1.25B per month for compute: Initial coverage of the Anthropic deal on May 20.

How long is Anthropic’s lease with SpaceX? Opinions vary: Elon Musk keeps downplaying the duration of SpaceX’s contract with Anthropic.

Google will pay SpaceX $920M per month for compute: A Google representative described the deal as a short-term deal addressing unexpected demand for its recently launched AI products.

This article originally published at 10 am ET, June 12, 2026. It has been updated with new coverage of the SpaceX IPO, share price, and other related events.

TL;DR

SpaceX raised $75 billion in the largest IPO in history, pricing 555.6 million shares at $135 each for a $1.77 trillion valuation. Japanese retail investors bought $2.2 billion of the offering through Mizuho, Rakuten, and SBI.

SpaceX begins trading on Nasdaq today under the ticker SPCX after raising $75 billion in the largest initial public offering ever completed. The previous record holder, Saudi Aramco’s 2019 listing, raised $29.4 billion, making SpaceX’s offering roughly 2.5 times larger.

A regulatory filing on Friday confirmed that Japanese investors accounted for $2.2 billion of the total, purchasing 16.3 million Class A shares, or about 3% of the offering. Japan was one of a handful of countries outside the United States, alongside Australia, Canada, and parts of Europe, where retail buyers had direct access to the shares.

How the Japan tranche worked

Mizuho Financial Group’s US investment banking unit is one of 23 underwriters on the deal. It ran the Japanese allocation through its local brokerage and two online platforms, Rakuten Securities and SBI Securities.

SpaceX initially targeted $2 billion from Japanese investors but raised the ceiling to $2.5 billion after demand surged. The final $2.2 billion makes it the largest first-time share sale in Japan since JX Advanced Metals’ IPO last year.

The global picture

Total investor demand reached approximately $250 billion, making the offering nearly four times oversubscribed. BlackRock alone reportedly placed a $5 billion order. Goldman Sachs led the 23-bank underwriting syndicate, with Morgan Stanley, Bank of America, Citigroup, and JPMorgan Chase among the book-running managers.

At the $135 per share price, SpaceX’s fully diluted valuation sits at approximately $1.77 trillion, making it the seventh-largest listed company in the United States, above Tesla’s market capitalisation of roughly $1.6 trillion. If underwriters exercise the full over-allotment option, total proceeds could reach $86.25 billion.

What SpaceX actually is now

SpaceX is no longer just a rocket company. After absorbing Elon Musk’s AI venture xAI in an all-stock transaction in February 2026, it became a conglomerate spanning reusable rockets, satellite internet, and artificial intelligence infrastructure.

Its S-1 filing disclosed $18 billion in consolidated revenue for 2025, alongside a net loss of $4.9 billion. Starlink, the satellite internet division, generated $11.4 billion in revenue and $4.4 billion in operating profit, accounting for 61% of total sales and all of the company’s profitability. The xAI segment recorded a $6.35 billion operating loss.

Musk’s grip on voting power

Musk holds approximately 42% of SpaceX’s equity but controls roughly 82% of its votes through a dual-class share structure in which his Class B shares carry disproportionate voting rights. That gives him unilateral authority to elect or remove a majority of the board.

The S-1 prospectus lists 849.5 million Class A shares and 5.57 billion Class B shares, a structure that ensures public shareholders have minimal governance influence regardless of their economic stake.

Who gets rich

The IPO is expected to mint roughly 4,000 millionaires among SpaceX’s workforce, including engineers, cooks, and administrative staff who received equity as part of their compensation. SpaceX set aside up to 5% of shares for employees and their associates.

Founded in 2002, SpaceX spent two decades as a private company, funding its operations through government contracts, private equity rounds, and Starlink revenue. The IPO marks the first time ordinary investors can buy shares directly.

The flags

SpaceX is unprofitable on a GAAP basis, with the xAI segment responsible for the $4.9 billion net loss. Whether Starlink’s profits can scale fast enough to offset xAI’s capital consumption is unresolved.

Musk’s 82% voting control means public shareholders are effectively along for the ride on all strategic decisions, including future acquisitions and capital allocation. The $1.77 trillion valuation implies growth rates no company has ever sustained at this scale, as Fortune has noted, and the xAI integration adds execution risk that did not exist when SpaceX was purely a launch and satellite business.

BlackRock submitted an order to buy at least $5 billion in SpaceX shares ahead of Friday’s debut, the Wall Street Journal reported. That single order is nearly as large as the entire $5.5 billion Cerebras IPO, the biggest of 2026 so far. SpaceX has told banks it will not budge from its $135 per share price.

Total investor demand has reached $250 billion, making the offering nearly four times oversubscribed, according to Reuters. SpaceX plans to sell roughly 555.6 million shares, raising $75 billion at a valuation of approximately $1.77 trillion. Retail investors have requested over $70 billion worth of shares. Up to 30% of the IPO may be allocated to public buyers.

Allocated shares will be available through Charles Schwab, Fidelity, Robinhood, SoFi, and E*Trade. Fidelity lowered its minimum account balance for IPO access from $100,000 to $2,000. Schwab still requires $100,000. Robinhood, SoFi, and E*Trade have no stated minimum.

Not everyone is enthusiastic. Senator Elizabeth Warren sent a 12-page letter to SEC Commissioner Paul Atkins requesting a delay. She argued the IPO’s size alone “would justify careful SEC review,” and raised concerns about SpaceX’s governance structure. Musk controls 85% of shareholder voting power through supervoting shares, mandatory arbitration, and Texas corporate law. Warren called it “unprecedented power” over investors who would have “significantly fewer rights than those traditionally offered.”

Market analysts have also pushed back on the valuation. Morningstar projected SpaceX should trade at $63 per share, roughly half the asking price. “Big Short” investor Michael Burry said there was “nothing” in the filing to suggest the company is worth $1 trillion, “let alone $2 trillion.” SpaceX valued its total addressable market at $28.5 trillion, a figure analysts called “nonsensical” and “smoke-and-mirrors accounting.”

The financials tell a mixed story. SpaceX disclosed a net loss of $4.28 billion through its latest quarter, after losing $4.94 billion in 2025. Starlink, which generated $4.69 billion in quarterly revenue, is the only profitable segment. The AI arm lost $2.5 billion. Capital expenditure hit $10.1 billion in the quarter, with $7.7 billion going to AI. SpaceX spent $12.7 billion on AI last year, compared to $3.8 billion on space.

If shares trade at $135, Musk’s 42% stake would be worth approximately $688 billion, making him the world’s first trillionaire when combined with his other holdings. SpaceX’s S-1 filing also revealed billionaire-making stakes for president Gwynne Shotwell ($1.6 billion), CFO Bret Johnson ($1.2 billion), and board members including Valor Equity’s Antonio Gracias, whose $4.8 billion net worth could surge by $68 billion.

The IPO arrives after a string of valuation adjustments and last-minute deals. SpaceX signed a $920 million monthly compute deal with Google and a $1.25 billion monthly deal with Anthropic in the weeks before the offering. Warren’s concern is that index funds will be forced to buy SpaceX stock, exposing millions of passive investors to “significant risks with no choice in the matter.”

SpaceX will disclose its final IPO price on Thursday. Trading begins Friday morning on the Nasdaq under the ticker SPCX.

SpaceX makes its public debut on Friday and some investors who backed the company through special purpose vehicles (SPVs) still don’t know how many shares they’re entitled to or whether they’ll get any shares at all.

Investing through SPVs, where multiple parties pool their money to invest in a single company, has been around for a while. But SpaceX represents an unprecedented case of an IPO with multiple layers of these vehicles. Since demand for SpaceX allocations has been so high in recent years, investors in an SPV have occasionally formed a new SPV from their shares, creating a structure sometimes stacked four or five layers deep.

SpaceX will be the first major test of the legitimacy of multi-layer SPV. In recent months, Anthropic and Anduril have announced that they are disallowing these structures.

Nearly a dozen SPV managers and secondary market investors who spoke to TechCrunch said that backers in lower-tier vehicles might find they own fewer shares than they think or, in rare cases, that they may not receive any shares at all.

In most situations, these investors won’t learn how many SpaceX shares they actually own until the company’s rolling lock-ups, scheduled to take place over about four months, begin to lift. That’s because SPV managers won’t begin distributing shares to investors in these vehicles until they get access to the shares themselves, sources told TechCrunch. Lock-up agreements prevent insiders, including employees, their friends and family, and venture investors, from selling shares for a set period after an IPO to prevent excessive selling pressure on the stock.

The first-layer SPV will have 30 days to distribute stock to its investors, said Justin Ernest, founder and managing partner of Sabertooth Capital, a firm that invests primarily in first-layer SPVs. Consequently, the next layer down likely won’t get its shares for as long as 30 days, meaning the vehicle below that must wait even longer to deliver stock to its own backers. For the final disbursement, the bottom SPV layer may have to wait eight or nine months, Ernest estimates.

A secondary investor, who asked to remain anonymous, told TechCrunch that some investors in “messy” multi-layered SPVs will be surprised to learn that some of the shares they expect to get will be “eroded by fees” pocketed by the SPV.

Ideally, the SPV manager communicates with the investors in their vehicle from the IPO date on. “Problem is you have a communication train with each person only knowing what’s going on in the layer above them,” the secondary investor said.

In short, the structural ownership of these vehicles has become so highly convoluted that even the best-intentioned SPV sponsors may end up inadvertently misleading their investors.

The biggest concern for downstream SPV investors is that they may not get any shares in SpaceX.

Giovanni Pennetta, the manager of Sestante Capital, was recently sentenced to four years in prison for fabricating access to non-existent allocations in the defense tech company Anduril.

The fear, of course, is that Pennetta is not the only deceptive sponsor out there. Investors at the bottom of these structures essentially had to confirm that every single manager above them was legitimate. But given the messy structures of these deals, it’s likely some buyers didn’t vet the entire chain.

“A friend just shared in confidence – they bought SpaceX through a 2 layer SPV in 2021. The returns are supposed to be worth any fees, the only problem – the SPV manager stopped responding to emails or calls,” Nick Davidov, founder of venture firm Davidovs Venture Collective, posted on X last month. He wrote that the investor hasn’t heard from the SPV manager for a year.

Idan Miller, managing partner at the secondary market Unicorns Exchange, is convinced that a few other bad actors will be revealed once lock ups expire.

“Once the lock up of the shares is removed, and these SPVs will start selling the shares, there will be some vehicles that will be revealed as scammers or fraud,” Miller told TechCrunch.

For once, SpaceX is ahead of schedule: Elon Musk’s space and AI conglomerate officially confirmed that it has raised $75 billion from the sale of its shares to its underwriters, who are set to begin marketing the company on the Nasdaq stock exchange Friday.

SpaceX priced its 555.6 million shares at $135 each, the company said in an update on its website. That makes SpaceX officially the largest IPO in history, easily eclipsing the $24.9 billion in funds raised by Saudi Aramco during its 2019 public markets debut. At this price, the deal also looks set to make Musk the world’s first trillionaire.

The company, officially known as Space Exploration Technologies Corp., will trade under the SPCX ticker symbol.

As active trading gets underway tomorrow, SpaceX’s share price may sink or rise. But anecdotal reports suggest that big institutional investors and individual buyers are lining up to purchase shares in the 24-year-old technology company.

If the sale is as oversubscribed as the talkative bankers make it out to be, they have an option to bring an additional 83.3 million shares to market, which would raise another $11 billion at the company’s opening price.

Hyperliquid, a crypto betting market that attempts to offer synthetic exposure to SpaceX stock, currently prices the shares at $167, suggesting that market participants expect a classic 20% IPO pop on the first day of trading.

In the longer term, there are big open questions about how SpaceX will be able to justify its eye-popping valuation. The company’s outstanding engineering projects, from the world’s largest reusable rocket to a new American chip fab, fill up a daunting to-do list.

This story is developing …

SpaceX has lined up another compute deal ahead of its historic IPO, this time with Google. The company announced the deal in a regulatory filing on Friday.

Under the terms of the deal, Google will pay SpaceX $920 million per month from October 2026 through June 2029 for access to “approximately 110,000 NVIDIA GPUs, CPUs, memory, and other related components.”

The deal is similar in length and scope to the one SpaceX announced with Anthropic in late May. As part of that deal, Anthropic agreed to pay SpaceX $1.25 billion per month through 2029 to rent all the available compute from its Colossus 1 data center near Memphis, Tennessee, that xAI — now part of SpaceX — originally built for its own artificial intelligence efforts.

Google’s deal appears to be paying for roughly half the amount of compute that Anthropic has access to at Colossus 1. SpaceX didn’t say which specific data center Google would be using. CEO Elon Musk has previously suggested his company would reserve the Colossus 2 data center for xAI.

Anthropic was significantly limited in its compute capacity prior to its deal with SpaceX, raising usage limits on the same day the deal was announced. Google is in a very different position, with some estimates naming it as the world’s largest single owner of AI compute.

In a statement, a Google representative described the deal as a result of unexpected demand for its recently launched AI products. “Google Cloud and SpaceX are long-time partners,” Google said in a statement. “This is a short-term, timely agreement to ensure we have bridge capacity to meet surging customer demand for our agent platform, Gemini Enterprise, which has been even higher than we expected.”

But its parent company Alphabet is on a spending spree. Alphabet has already committed to more than $180 billion in capital expenditures this year and has said it expects that to “significantly increase” in 2027. To help with that, Alphabet recently announced an $80 billion equity sale.

Also like the Anthropic deal, the agreement with Google includes a cancellation clause. Both SpaceX and Google have the option to terminate the agreement with 90 days’ notice after December 31, 2026. Google’s access to the data center will ramp up “through September at a reduced fee,” according to the filing.

“If we fail to deliver access to the committed amount of GPUs by September 30, 2026, then following a one-month grace period, Google may immediately terminate the agreement or accept the number of GPUs provided” with a reduction in the monthly fees, it reads.

SpaceX announced the deal just one week before the company’s stock is expected to start trading on the Nasdaq exchange. Paperwork filed with the Securities and Exchange Commission shows the company is aiming to raise around $75 billion at a valuation of around $1.75 trillion — making it the largest in history.

Google is a longtime investor in SpaceX. Its stake in Musk’s company is expected to be worth more than $100 billion after the IPO. The companies are also reportedly in talks to try to build orbital data centers — a major component of SpaceX’s future plans post-IPO.

SpaceX is warning investors that it may dole out “significant equity” in “future transactions” following its upcoming IPO — language that was added amid constant industry gossip that CEO Elon Musk ultimately plans to merge his space-and-AI company with Tesla.

The new language was tucked deep in the risk factors section of SpaceX’s first official amendment to its IPO filing, which was made public last month. The company tacked this sentence onto the end of the first paragraph of a risk about how mergers and acquisitions may go sideways:

We may issue a significant amount of equity in connection with future transactions.

SpaceX has been busy with M&A, acquiring Musk’s AI company xAI last year, and recently entering into a deal with Cursor that includes an option to buy the startup for $60 billion in stock following the IPO. It’s certainly possible that SpaceX will have other targets in mind after it raises a reported $75 billion when it lists on the Nasdaq exchange (minus $20 billion committed to paying down former xAI and X debt). But this warning seems tailored to prepare investors for the possibility of a major dilution event — like a future combination with Tesla.

Musk has mused about combining his companies for many years, and the SpaceX IPO is only heating up the chatter that he will finally bring his two biggest entities together. A merger of this size would face a number of legal and potential regulatory challenges, and would likely have to pass a shareholder vote at Tesla. But, as the IPO filing showed, Musk has supreme voting power at SpaceX; the only person who could vote down a merger on that side of the term sheet would be Musk.

Musk’s voting power at SpaceX would not be at risk during a major dilution event. SpaceX has three primary classes of shares heading into this IPO. They all have the same basic economic rights, but different voting rights.

The Class A shares are what will be sold to the public and come with one vote per share. The Class B shares are owned exclusively by Musk and have 10 votes per share. SpaceX also has Class C common stock, which comes with no voting rights at all. While those Class C shares are currently used for executive compensation, Musk could use those shares to buy other companies without diluting his power. (SpaceX also has Class D shares set aside, which have reduced economic rights; the company has not yet decided whether those shares will have any voting power.)

TL;DR

Space stocks are selling off sharply as the SpaceX IPO approaches and a Blue Origin rocket explosion rattles investor confidence. The Procure Space ETF dropped 11% in two sessions, with Rocket Lab, Intuitive Machines, and AST SpaceMobile falling 17-23%.

A rally that carried space-related stocks to extraordinary gains this year is showing serious cracks. The Procure Space ETF, which trades under the ticker UFO, has dropped almost 11% in just two sessions. Intuitive Machines and Rocket Lab have each fallen roughly 17%. AST SpaceMobile, which had become a retail-trading favourite, has sunk nearly 23%. The selloff extends losses that began late last week and accelerated on Monday.

Two catalysts converged. On Thursday, Blue Origin’s reusable New Glenn rocket exploded during a routine hot-fire test at Cape Canaveral, a spectacular failure that damaged the launchpad and reminded investors that the space business remains physically dangerous and technically unpredictable. On Friday, SpaceX cut its IPO valuation target to $1.8 trillion from at least $2 trillion, signalling that even the sector’s dominant player is acknowledging that market expectations may have run ahead of reality.

The proxy trade unwinds

The space stock rally of the past several months was driven substantially by the anticipation of SpaceX’s record-setting IPO. With SpaceX private, investors who wanted exposure to the space economy bought publicly listed proxies: Rocket Lab for launch, Intuitive Machines for lunar services, AST SpaceMobile for satellite communications, Redwire for space infrastructure. As SpaceX’s IPO filing moved from rumour to reality, these proxy stocks surged on the assumption that a rising tide would lift all rockets.

The Procure Space ETF is still up almost 60% year to date despite the two-day rout. Rocket Lab entered the selloff up 413% over the past year. But Bloomberg Intelligence analyst George Ferguson identified the structural problem: once SpaceX is actually available to buy, investors may dump the proxies in favour of the real thing.

“The market may be worried investors that want exposure to space will drop the currently listed names for SpaceX, as it has a much larger and better record of space launches,” Ferguson said. “At similar valuations, SpaceX would likely be the better company to own.”

Valuations detached from financials

Jefferies analyst Greg Konrad underscored the disconnect on Monday by downgrading Redwire from buy to hold, writing that the stock’s recent gains “do not correlate with financials” and instead reflect “multiple expansion on the excitement of the SpaceX IPO that has shed a positive spotlight on the space sector.” Redwire had nearly tripled in the previous month to a record high before dropping 16% on Monday. SpaceX’s own S-1 filing revealed the financial scale that makes comparisons with smaller space companies difficult to sustain.

AST SpaceMobile trades at roughly 260 times estimated 2026 sales. Rocket Lab, despite its operational progress with the Electron and Neutron rockets, carries a valuation built on optimism about future government and commercial contracts rather than current revenue. The space sector has followed a pattern familiar from the AI boom: a narrative-driven rally that prices in years of growth before the revenue materialises.

The Blue Origin factor

The New Glenn explosion added a visceral dimension to the correction. The rocket erupted during a hot-fire test of its seven BE-4 first-stage engines, sending debris across the Cape Canaveral launchpad and causing heavy damage to the infrastructure. While SpaceX has experienced its own launch failures, the Blue Origin incident reminded public market investors, many of them new to the space sector, that rockets are not software. Hardware failures destroy expensive assets instantly and set development timelines back by months or years.

“That implies valuations are a bit rich,” Ferguson said. The Blue Origin explosion was “a reminder that this is a difficult business.”

Virgin Galactic’s divergence

Not every space stock fell. Virgin Galactic soared as much as 44% on Monday before paring gains to as little as 1.1%, a move that illustrated the speculative, momentum-driven character of the sector rather than any fundamental shift in the company’s business. SpaceX’s lowered valuation target may have triggered short-covering in some names while accelerating selling in others.

The question for the space sector is whether the SpaceX IPO, expected to price in early June with marketing beginning on 4 June, draws capital into the sector or pulls it out of everything that is not SpaceX. If institutional investors consolidate their space exposure into the one company with a proven business model, consistent launch cadence, and Starlink revenue, the proxy stocks that rode the wave up could face sustained pressure even as the overall sector grows.