EXPLAINED: WHY IS SPACEX CRASHING TODAY?!?
In a Nutshell
SpaceX shares plunged 32% to $155.86 after the company announced a $20 billion bond sale to fund its unprofitable XAI division, triggering dilution fears and sparking an $800 billion market-cap wipeout. The stock's sky-high valuation—near $2 trillion despite $8 billion in annual losses—has collapsed amid insider selling starting August 11 and broader market jitters. The speaker warns that speculative IPOs like this typically correct sharply once initial hype fades and fundamentals reassert themselves.
These notes were generated by AI and may contain inaccuracies.
SpaceX is down from highs of 230 per share to 155.86 during extended hours, representing a 32% decline and nearly one-third of its value lost in the past few trading days. The stock rallied significantly prior to this drop, leaving most investors who did not purchase on IPO day in the red. The speaker asks viewers to comment on their positions and whether they plan to cut losses or hold long-term.
SpaceX launched a $20 billion bond sale to fund AI expansion. Markets sell off on uncertainty and fear, similar to Google's $80 billion dilution share offering that caused its stock to drop. The funds target investment in XAI, SpaceX's direct competitor to ChatGPT and OpenAI.
The primary concern is dilution of SpaceX shareholders through capital raising, combined with XAI burning through substantial capital without a clear path to profitability. Investors worry about overinvestment in an unproven area lacking a solidified profit plan. This is not new behavior from Elon Musk, who tends to be very risk-averse, but the uncertainty has spooked investors.
The $20 billion bond sale for XAI expansion—not SpaceX operations—is identified as the main driver of the selloff. SpaceX has lost over $800 billion in value. The speaker notes the valuation never belonged at prior levels, citing Investing Pro data showing a negative $235 multiple for its P/E ratio. The company generates $19 billion in revenue but loses $8 billion, burning through capital while valued near $2 trillion. This has reduced Elon Musk's net worth from $1 trillion to $998 billion.
The first wave of insider selling begins August 11th, meaning current pressure could intensify once sellers exercise rights. Markets are overbought, and Middle East tensions add risk. If broader markets decline, speculative companies with irrational valuations face additional pressure. The speaker has previously warned about SpaceX's speculative nature before its IPO, stating no intention to short during the rally but also no intention to buy the dip.
IPOs typically see initial excitement followed by corrections, which is now occurring. While Elon Musk's leadership provides conviction, continued market selloffs could cause further declines. The August 11th insider selling wave adds uncertainty about future price impact. The speaker would not be surprised by continued downside given current levels and market conditions.
Micron, Intel, and SanDisk are highlighted as top-performing stocks of 2026 reaching new all-time highs and appearing overbought. The speaker notes that speculative stocks crash first during market selloffs and offers to create a detailed video or host a live stream analyzing semiconductor and AI companies, including Intel, Micron, SanDisk, and Marvel, covering both technical and fundamental aspects.
People rarely care about overvaluation when prices move favorably but become concerned after losses, as seen with buyers at 220 per share now facing 155. Fundamentals eventually matter despite being ignored during irrational rallies. The speaker emphasizes risk management and position sizing over encouraging profit-chasing, noting that making $500 means nothing if $700 is lost the following week. The goal is helping beginners preserve capital through calculated, intentional trading with moderation.
Viewers can access live trading sessions via the second link in the description, with the next session scheduled for market open tomorrow. Investing Pro software is available via the first link for fundamental company analysis.
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