(Bild: PJ McDonnell/Shutterstock.com)
One of the largest IPOs in history is now trembling on uncertain ground. Analysts from Mahoney Asset Management warn: the SpaceX crisis in the capital market has just begun.
Just weeks ago, Elon Musk’s aerospace and telecommunications company, SpaceX, made headlines with its initial public offering (IPO). Despite the hype, financial markets are showing increasing skepticism toward the company as it faces pressures on two separate fronts.
The Bond Market Drama
While SpaceX shares closed at $136.08, just above the IPO price of $135, a far more significant drama is playing out in the bond market. As reported by the Financial Times, the risk premium on SpaceX’s long-term bonds maturing in 2056 has expanded from 175 to a staggering 231 basis points over U.S. Treasuries within just a few weeks. This bond has become the worst-performing BBB benchmark bond in the entire ICE-BofA index.
To illustrate the magnitude of these changes, consider this: an investment of $100 million made at the IPO would now be worth only $90.7 million, with over two-thirds of the loss attributed not to the general sell-off of long-term U.S. Treasury bonds, but to a widening of spreads—indicating growing distrust in SpaceX as a debtor.
Transitioning from Investment Grade to Junk Status
The situation becomes more alarming when compared to the broader market. In the ICE-BofA Triple-B U.S. Dollar Corporate Bond Index, which lists 5,543 bonds, SpaceX’s 2056 bond occupies the last position since its inclusion at the end of June. Its yield spreads are increasingly approaching Double-B levels, which analysts consider speculative and commonly refer to as “junk.”
Following the IPO, SpaceX raised a total of $25 billion through five bond tranches, maturing between 2031 and 2056. The issuance was oversubscribed by approximately $90 billion in orders, prompting SpaceX to increase the planned volume from $20 billion to $25 billion, with a consortium led by BofA Securities, Citigroup, Goldman Sachs, JPMorgan, and Morgan Stanley.
Stock Price Under Pressure
Simultaneously, SpaceX’s stock is under continuous pressure. According to Bloomberg, shares have lost approximately one-third of their value since the IPO, resulting in a staggering loss of nearly $850 billion in market capitalization. The stock price dipped to $133.34, marking a decline below the initial offering price.
Ken Mahoney, CEO of Mahoney Asset Management, expressed doubt that SpaceX had reached its lowest point, forecasting a “continuous supply” of shares due to impending lock-up expirations for insiders.
Massive Losses Behind a Billion-Dollar Valuation
Despite generating around $18.6 billion in revenue in 2025, SpaceX reported a net loss of $4.9 billion, with only its Starlink satellite service turning a profit. The newly acquired AI subsidiary xAI further strained the balance sheet with an operational loss of $2.47 billion against only $818 million in revenue.
Renowned investor Michael Burry, famous for his bet against the U.S. housing bubble, has openly distanced himself, stating that SpaceX is “essentially a small aerospace company and a niche telecommunications company.” He emphasizes that nothing in the IPO prospectus justifies the company’s reported valuation of one or even two trillion dollars.
Institutional Skepticism and Future Outlook
Institutional investors are also reacting with skepticism. The Danish pension fund AkademikerPension had placed SpaceX on its blacklist before the IPO, criticizing its valuation as “generously overstated.” For bond investors who retain their holdings until 2056, the elevated yield spreads could translate into higher returns, provided that SpaceX survives the interim.
The situation appears precarious for the company. Analysts had initially anticipated the bond market as a primary source of external funding for the coming years, but this strategy falters as spreads approach junk status.
