SpaceX Stock Crashes Nearly 50% | AI Bubble Bursting?

**John Johnston** (0:00)
Hi, everyone, JJ here. Welcome back. Well, today, SpaceX stock is still crashing, now down nearly 50% from that post IPO high that it had, that euphoric high, that sugar high, we could say, and now it's down nearly 50%.
Also today, is the AI bubble bursting? Is it starting to burst? Is it starting to crack? We're gonna have a look at some signs. There's quite a few things going on in the market. Things are still pretty euphoric, but there are definitely some signs of things starting to crack, whether that's temporary or not. I mean, I don't think anybody's definitively saying that it's popping, that it's bursting just yet, and these things don't happen in a straight line, and they often don't happen all at once. It's just down a little bit, down a little bit, up a little bit, down a little bit.
Contrary to popular belief, sometimes there's a big crash of huge percentages, and that can happen along the way, but often it's not like that. So it takes time to actually work out if it is bursting, if a bubble is bursting, and what's going on with the market. But this headline here first, SpaceX stock closes at fresh low after seven straight days of losses.
SpaceX drops more than 3% on Monday. We'll have a look at the stock chart in a minute. Marking seven straight days of losses and a new low.
The stock is down nearly 50% from the record high set just days after its historic IPO in mid-June. Key upcoming events include SpaceX's first earnings report as a public company and the expiration of agreements that prohibit early investors and employees from selling the stock. Yes, lockups are going to expire, so people will be able to sell insiders, people will be able to sell. Is the market anticipating that in the sell off? But this is the stock of course down another 3.34% today. It has been on a tear downwards. Will it continue? We'll have to see. You know, Tesla has been along with it too. It's been going down. You know, it's been sidelined a little bit. If you haven't noticed, it's been going down too. And so these stocks in tandem and some people think that Tesla is going to get rolled into SpaceX, don't know. Maybe it will depend on the market and what Elon will do there. But we can also see this too. SpaceX, in your index fund explained, index funds are supposed to be the safest way to invest. Does SpaceX change that? So let's talk about this. I'm not going to get into this article, but it went into the NASDAQ 100 Change the rules for Elon, for SpaceX. Will that be regrettable? I mean, I did not like that that would happen. So some people who own the NASDAQ 100, well, everybody who does is affected by this. Not in a massive way, but it is there and the rules were changed. So that's something, another really feature. I think when we look back on this, this will be a feature of the craziness of the times, and maybe there'll be some post-mortem investigations later down the line. Now, I want to point to this video here. Did the market bubble peak two weeks ago? So this is a value investor, Sven Carlin, who points out this chart here, if you're watching on video, not just listening to this, that the market is down a little bit. I mean, you can't say that it's a bubble bursting until at least a bear market, you know, which is a correction 10% down, a bear market down 20% and then could go down more. We just don't know. We'll have to wait and see, but he's not saying that it is. As I said, nobody's definitively saying that, but he's been pointing out the signs for a while and I've been pointing out the signs of a bubble for a while. So we'll have to see what happens. I'm not going to play that video, but here we can see the market here, the S&P 500 I mean, it's not down very much. If it turns out to be the peak, I mean, it's only down a few percent. And if we go back five years, we can see it's had a pretty phenomenal run and it will go down maximum. And then it starts to look like this massive curve up. It's been a really long bull market. Really since, I think it was March 2009, it's really been on a tear since then. I mean, yes, there's been some down markets along the way, but really a long bull market. And I have pointed out the ways that it kind of looks expensive from the Shilla P ratio, which is almost up to.com bubble levels, that kind of thing. And this is the NASDAQ, of course, focused more on tech. And we can see that that's down a little bit too. It's down nearly 6% from the high so far. So will it continue? Will it go up? We just don't know. And again, if we go to maximum here, we can see that incredible run that it's had over time. Now I did want to point to this as well. This Jim Chanos often labeled famed short seller. He's been involved in some famous short sales over the years, including Enron, pointing that out being involved earlier in his career, pointing out Enron that that was a fraud, but he's had some wins and some losses. Not so good in this bull market, but he did point out that he's had some good successes lately. He's not running money for others, not managing a fund, but he's advising people. The video is called the AI bubble is much worse in.com. And he said that before, and I have shown that before, but here he presents a pretty detailed case about what he thinks going on. So I'm going to just read a little bit of this description here. By the way, if you're getting value out of this video so far, I would appreciate it if you're watching on YouTube to hit that like button to help the algorithm. Anyway, Dan and Guy from Risk Reversal Media here, this is this podcast, speak with legendary short seller Jim Chanos about extreme market dispersion beneath an S&P near all time highs. And we saw that, yes, it's down a little bit, but you know, it could just be a dip. I mean, it's nothing to write home about yet. So rising retail speculation and a new wave of IPO. So he says that he talks about the three legged store here, rising retail speculation is the thing that he's noted lately. Secondaries and insider selling. So secondary funding, SpaceX and Google, you know, going to the public markets for funding. So these are the signs of really markets that companies feel able to go in and raise huge amounts of money. And that is what's happening for AI or AI spend, CapEx spending from these, Mag Four really that are doing it.