SpaceX Stock Crashes $1T & AI Trade Reverses!

**John Johnston** (0:00)
Hi everyone, JJ here. Welcome back. Well, as I'm sure you know, SpaceX stock has been crashing, losing around a trillion dollars of market value from its initial peak. And so far, I mean, how low can I go? We'll see. It's no surprise to many people who watch my pod, and you know, pods like mine or like minded people. So we have this headline here that says it, SpaceX stock drops to a new low and loses one trillion in value in a month. And this one here from the Financial Times, traders are increasingly betting against SpaceX just weeks after the IPO. So there's a lot of shorting going on as this gathers pace. Elon Musk doesn't like it. I saw him tweeting out something that firms, companies that are betting against SpaceX or shorting SpaceX will lose out in the longer term. He said similar things about Tesla. You notice that a lot of CEOs don't say stuff like that. Have you ever seen Jeff Bezos even talking about short sellers or railing against short sellers rather than just getting on with making the company great and making money for the company, not worrying about what the stock price is doing, what short sellers are doing because it should work out if the company is good. Anyway, we'll get into this and also the AI trade, how that is going. It's been gathering pace on the downside as well. Semiconductors, see how this is related to SpaceX. SpaceX is really an AI company mostly. You look at that target value or the total addressable market is mostly AI. I mean, that was in the prospectus. So it's related and how the Korean stock market, maybe you don't know much about that. Maybe you do, but it's been hugely volatile. It's been up over 100% in the past year and going down too. And this is related to AI too. So is this an indicator of things to come? So we'll get into that as well. Let's just read a little bit as a lead in this article.
Shares of Elon Musk Rockets and AI company have slipped below their listing price for the first time. So I've already made the last video was about that. But this has more detail on what's going on under the surface. As I said, related to AI, traders are raising their bets against SpaceX's equity and debt just a month after Elon Musk Rockets and AI company went public in the biggest initial public offering on record. SpaceX's shares this week slipped below their initial listing price of 135 for the first time, down 40% from an intraday high of 225 That seems pretty high compared to now 225 As I said, not a surprise to many of us that it's gone down from there and pretty quickly. So it was mid June in the days after the billionaires, well trillionaires, not a trillion anymore.
So let's say X trillionaires conglomerate raised $86 billion in a valuation of almost $2 trillion. And all those investment banks, all the Wall Street investment banks having price targets. I mean, I don't know what's going to happen in the future. Will that be investigated? What went on there? You know, maybe that will be looked at in the sober light of day later on to see how amazing that was, some of the valuations. I think one was as high as 700 or even more than that. It was just amazing. On Friday, the stock fell more than 5% to close at a fresh low of 123.99.
That was on Friday. So we'll see what happens on Monday. Short sellers betting against the shares have in the past month booked paper profits of about 4 billion, according to S3 Partners data.
About 30% of the roughly 640 million SpaceX shares available to trade have been borrowed to sell short 30%.
So that's pretty high.
Up 10 percentage points over the past 10 days, they say, the Financial Times, highlighting how traders are becoming increasingly skeptical of the company's market prospects. So people getting sober as the party over, or could they have another leg up? This AI trade, the space trade, is all related. Data centers in space, orbital data centers, all that. So investor enthusiasm for SpaceX seems to have cooled. Managing director of SLC Management said, the company's equities and bonds are suddenly pricing in more risk. Wow, suddenly risk-averse. The sell-off has come against the backdrop of a broader downturn for richly valued, previously high-flying tech stocks at the center of the AI investment boom. Well, previously high-flying, they're still high-flying. Some have come down, but still, US semiconductor chips on Friday ended their worst week since last year's Liberation Day market route. So that was the announcement of the tariffs and all that. Yes, and SpaceX shares down, down 22.96%.