SpaceX Crash Is About To Get A Lot Worse?
In a Nutshell
Markets are reversing after an initial rally on Iran news, with SpaceX dropping nearly 10% and losing $250 billion in market cap. The stock's extreme valuation (negative 235x P/E, $8.6B net loss on $19B revenue) faces further downside risk if it breaks below $160. Speculative assets like SpaceX and Rocket Lab are vulnerable to sentiment shifts and uncertainty, requiring strict risk management and profit-taking discipline.
These notes were generated by AI and may contain inaccuracies.
Markets opened strongly on Monday, pushing up to highs of 7:45 based on news that JD Vance announced ongoing talks with Iran in Switzerland. The next 60 days of plans regarding Iran were outlined, showing what was described as great progress.
Markets began to pull back and are slightly in the red, down about half a percent after being up nearly 1% at the peak. Uncertainty is beginning to present itself in the market.
Markets are elevated and at overbought levels. Markets are described as incredibly irrational, looking for any reason to continue ticking higher. A single tweet or update from Trump could spark recovery even if not true. Nothing announced today was new information not already factored in on Thursday. Markets pushed higher based on excitement that the deal is not falling apart.
Markets are pulling back, and the recommendation is to make money shorting. Take profits when it makes sense and do not carry positions longer than appropriate. Markets are testing oversold levels with some big losers on the day.
SpaceX is down 9 to almost 10% on the day. Over $500 billion has been wiped from the market in the first 20 minutes of the sell-off. SpaceX lost 10% of its value, dropping from a $2.4 trillion market cap to $2.3 trillion, representing a $250 billion loss in market cap value.
No one could have predicted the extent of the rally, but history and statistics show that every IPO is different. The potential upside of the most anticipated IPO was discussed, but also the history of IPOs where corrections follow when hype fades or uncertainty presents itself. SpaceX is now back at the same levels as its IPO day.
Anyone who purchased SpaceX leading up to the highs of 230 is down roughly 20 to 27%. Speculative assets should not be purchased with margin or leverage as positions can quickly turn against investors.
SpaceX announced it has $100 billion in cash as of June 19th, 2026, officially released through an SEC filing. The question is whether this disclosure is enough to spark excitement.
Rocket Lab is down 7% and was down roughly 10% from highs of 156. The stock lost $50 per share, representing roughly 36 to 37% decline. Excitement about space exploration has diminished across multiple companies.
SpaceX is characterized as a speculative asset with Elon Musk behind it. Market sentiment can shift dramatically from unstoppable excitement about space exploration and billions in investments to questioning whether these investments are necessary. The change in sentiment is described as insane.
If SpaceX breaks below 160 and falls below its IPO price, things could become dangerous. This is before any insiders can start selling. The stock may find support and begin to recover. The stock is being watched closely to learn how this highly anticipated IPO trades through market ups and downs.
Based on fair value and analyst price targets, SpaceX has 10% downside remaining. The company has a negative 235x multiple for its P/E ratio. Revenue is $19 billion, but the company loses half of that with an $8 billion net loss, specifically $8.6 billion after the $19 billion in revenue.
SpaceX could potentially go below $100. Questions raised include why the stock needs to trade at an insane valuation and why it cannot correct if not yet profitable. Caution is advised especially during uncertain times.
The US issued a 60-day general license authorizing the sale of production and delivery of Iranian oil, something that has not been allowed in years. Details of the agreement between Iran and the US include Israel stopping attacks on Lebanon. However, the Israeli Prime Minister reaffirmed that Israel's military will remain inside of Lebanon.
If more uncertainty injects into the market, markets have reason to continue correcting. Speculative companies like SpaceX will most likely continue to fall. During uncertain times, irrational valuations are not truly supported, though they can be supported during bullish times. Paying attention to market sentiment, conviction, and uncertainty levels is important for determining when to be aggressive versus conservative.
Traders should calculate trading capital, risk per trade, win rate, risk-to-reward ratios, and number of trades per day to determine potential profitability. A terrible success rate combined with a 2:1 or 2.5:1 risk-to-reward ratio means that over time, especially for overtraders, all gains can be given back. Understanding whether one's current edge is profitable long-term is critical.
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