SpaceX IPO Frenzy Faces Reality Check as Valuation Concerns Mount, Says Finance Professor

SpaceX’s IPO was greeted with exceptionally strong demand from institutional and retail investors alike, with the market quickly piling into Elon Musk’s latest marquee listing despite repeated cautionary notes from analysts ahead of the company’s Nasdaq debut.

Over the past trading sessions, however, the stock’s momentum has clearly reversed.

The key question now is whether SpaceX shares are entering a broader consolidation phase or whether recent weakness simply reflects profit-taking after an explosive post-IPO rally.

More importantly, what risks are investors now exposed to at current valuation levels?

To address these issues, Money.it interviewed Marshall Langer, Professor of Finance at the Rome Business School.

Langer brings more than 12 years of experience across both Wall Street and European capital markets, having held roles at institutions including BNP Paribas and Donaldson, Lufkin & Jenrette.

SpaceX shares: from IPO pricing to the close of the first trading week on Nasdaq

Before turning to the outlook, it is worth reviewing the stock’s performance since listing until the end of last week.

Shares in the aerospace group surged from the IPO price of $135 to above $229.85, a level reached during after-hours trading on Tuesday, 16 June 2026.

During regular market hours, SPCX posted an intraday high of $225.64 on the same day.

From its Nasdaq debut on Friday, 12 June, SpaceX shares had therefore rallied by more than 67%.

The reversal began on Wednesday, when the stock declined 5%, followed by a further 3.56% drop on Thursday, 18 June, to close at $185.

Even after the recent sell-off, SpaceX shares were still trading roughly 37% above their IPO price as of the close of the last week (Wall Street was closed on June 19^th)."

Does the stock remain materially overvalued relative to fundamentals?

And after the initial IPO-driven exuberance, is the market now moving into a more disciplined price-discovery phase?

These are some of the questions Money.it put to Marshall Langer, Professor of Finance at the Rome Business School.

Question: How do you assess the outcome and early trading performance of the SpaceX IPO?

Answer: So far, it has only been a couple of days, but it looks OK. The stock is up a little bit. I checked it just before this, and it was trading at around 202. It started at around 185, so it is up. But if you look at the fundamentals, it is trading at a very high valuation.

You cannot really get a price-to-earnings ratio because it has negative earnings and even negative operating profit. It has revenue of about $18 billion, so it is trading at roughly 140 times revenue.

As a comparison, Apple trades at around 10 times revenue, or even less. Even if the stock were cut in half, it would still be trading at around 70 times revenue, which is very, very high. So it has a really high valuation.

Tesla had that too for a long time, or still does, so maybe Elon Musk can justify that. But investors still need to get their money back on the money invested over a five- to seven-year period. There is no new methodology for that. If they do not get the money back, the company has to grow tremendously fast to pay them back.

At this level, it would take 144 years just to pay back the valuation from revenue alone, and that is assuming revenue was all profit. So the early performance looks good, in the sense that the stock is up, but it could easily be cut in half and still be an overpriced stock. Who knows what happens. It depends on how much bluster they put behind it, how much good news keeps coming out, and things like that. In my opinion, there is a little bit of the greater fool theory here. It is a very, very highly valued stock.

Q: Were you surprised by investor demand, pricing, or initial market reaction?

A: No, I was not really surprised by the investor demand. They talk it up well, and Elon Musk is a heroic figure to many people. He is a trillionaire, brilliant, and there are many things in his favour. So I can understand why the stock has had an upward move. But if the whole market goes down, it is highly likely that this will go down more than other stocks because the valuation is just not supported. You need earnings to repay your investment within about seven years.

You should get back the net income within seven years, so the company has to grow tremendously and become profitable. I am not surprised by the initial demand, but you have to see what happens in six months and whether it is still good then.

Q: Is the current valuation justified by fundamentals, or does it reflect excessive future expectations?

A: Absolutely not. The current valuation is not justified by fundamentals. Maybe it is a different world, but in the end, it still comes down to money on money. Trading at around 140 times revenue is a very, very high valuation. There is no way to get a price-to-earnings ratio because earnings are negative, but that would also be very high. Enterprise value to EBIT is also probably negative, or if it was not negative, it would be extremely high because EBIT is very low.
This is really a futuristic thing. You have to see where it comes out in a few years. Most stocks with this kind of crazy valuation are not supported by the fundamentals. So it is not really a fundamental play. It is more of a hope, or hope that things change, kind of thing.

Q: What is your fair value estimate or target price range for the stock over the next 12 to 24 months?

A: Personally, if it traded at 20 times revenue, I would still think that was a highly valued stock. Let’s say it gets up to $30 billion of revenue. At 20 times revenue, that would imply a $600 billion stock, which is already a lot. It is currently trading at around $2.3 trillion, so that is roughly four times that level. I think it is well overvalued. But again, a lot of these stocks are easy to miss. Tesla always looked overvalued and kept going up, and the same happened with Apple, although not to this degree. Personally, even if it was trading at half of the current level, I would still think it was fully valued, or at least not cheap. It could easily come down if the market changes or turns. I do not know if I would buy a lot of it. That is my personal view, and I have missed a lot of things, so I cannot say I am always right at all. But personally, I think I would probably be happy to see it at around 150 over the next 12 to 24 months. Again, I am basing that on fundamentals.

Q: What are the key risks investors may be underestimating?

A: When investors look at something like this, they usually look at the operating risks. For example, whether there will be as much demand for space travel, what competitors are going to do, what Jeff Bezos or NASA might do, and whether the business can remain at a reasonable price.
You can test those things within a range. You can say: very high price, very low price, or if competitors do X, this affects SpaceX negatively by a lot. You can run scenarios to see what happens. The bigger concern is the kind of risk that you cannot really predict.

For example, a government policy change, access to financing, or an accident. If there is an accident, what impact will that have? People might say, Well, “it happens in space” like with Blue Origin recently, although no one was killed there. But when the Challenger accident happened in 1986, I think there was not another space shuttle for more than 30 years. These kinds of things can cause a big setback. I do not know. Elon Musk has access to an enormous amount of capital, so he may be able to fund it, but it is hard to say. Other risks include the effect of an accident, access to the technology they need to get to Mars, and whether it is sustainable up there.

These are huge questions. Elon Musk is in his early 50s, or around his 50s, but 20 years can go by very fast in space travel. Who knows. There are also questions around the bench he has. He obviously has brilliant people working for him, but I have always wondered about that. I read a book about him, and he seemed like the glue that brought people together somehow, the key insight that helped everyone finally see the light. So who knows whether it is possible without him. You could look at what happened with Thomas Edison when he died, although companies are more complicated now.

I also think government policy is a risk. There seem to be movements in the United States because people feel that the really brilliant technologists are making all the money and getting paid while leaving others behind. Personally, I do not really want to see that. I think people could go back to school, learn these things and participate, rather than try to hold back progress. But it is easy for politicians to get people on their side, and you could have government policy that works against them.

So there are a lot of unknowns that are hard to test for and that could cause a big potential loss or affect access to future revenue. Those are some of the risks I would point to. Not so much the operational risks, because you can test for those, but the unpredictable ones: government change, accidents, atmospheric problems in space.

They are acting as if they know this area, but it is one thing to go to the Moon and another to go much, much farther. It takes a long time. I think they were saying the other day that it is a lot of days to get there, maybe months, like nine months of travel to get to Mars at high speed. These are serious risks.

Q: Do you view this IPO as a broader signal for sentiment in AI and high-growth technology markets?

A: Yes, it is always a signal until there is a setback. There could be a huge setback, and the market could go down 5% or 10% in the next week. You just do not know. In my life, I have followed markets to some degree and worked in them, and these drastic changes, like in 1987, 2000 and 2008, happened very quickly. So it is a signal that, immediately right now, there is appetite. But that could change quickly. There is a lot of AI, and a lot of money is needed.

I heard that the capital expenditures needed next year are staggering. Some places are blocking them now because they use too much electricity. It is hard to see the societal reaction if AI displaces jobs and all kinds of things like that. So yes, it is a signal that there is appetite. But one very large IPO could also suck up a lot of the capital, and then there may not be enough for everyone else. This has happened in the past.