SpaceX shares traded below $135 for the first time Thursday morning, breaching the initial public offering price set three months ago. The stock closed just above that mark Wednesday after touching $133.80 intraday. The move arrives as the company's $250 billion acquisition of xAI—Elon Musk's artificial intelligence venture—draws attention away from a broader collapse in private equity exit activity across the market.
Roughly 48% of mega-cap IPOs sink below their offering price within the first year and remain underwater for an average of 32 months, according to Renaissance Capital data spanning two decades. Meta Platforms traded 27% below its $38 IPO price for 15 months before recovering. Alibaba spent 11 months underwater. The SpaceX move is mechanical, not exceptional. What separates this case is the simultaneity: a headline acquisition masking a market where no one else is getting out.
The xAI transaction—structured as an all-stock deal at 1.85x SpaceX shares per xAI unit—creates the appearance of liquidity without providing it. Private equity firms holding SpaceX stakes through secondary purchases in late 2025 are now underwater on a mark-to-market basis, but the xAI deal gives Musk a narrative of aggressive deployment while the exit window stays shut. First-quarter private equity exit volume excluding the SpaceX-xAI transaction fell 62% year-over-year to $47 billion, the lowest since Q2 2020. The Musk transaction accounted for 84% of reported exit value in the period.
Allocators who entered SpaceX in the $110-$125 range during 2024-2025 secondary rounds face a choice: hold through a Meta-style trough or crystallize a loss in a market where distribution opportunities have evaporated. The IPO itself was a liquidity event for early Founders Fund and Gigafund positions, not a capital raise. SpaceX pulled $8.2 billion in primary proceeds but allowed $14.7 billion in insider selling. The stock's decline reflects that imbalance more than operational deterioration. Starlink revenue is tracking $6.8 billion annually, and Starship flight cadence hit 9 launches in Q1 2026, up from 4 in Q1 2025.
The technical setup for SpaceX mirrors Meta's 2012-2013 period in one respect: institutional ownership remains thin. Only 22% of the float is held by funds with over $1 billion in assets under management, compared to 41% for the median post-IPO tech stock at the three-month mark. The xAI deal does not add outside institutional holders; it consolidates Musk's control and creates a closed loop of related-party liquidity. If the stock remains below $135 for another 30 days, certain structured note products tied to the IPO will trigger par redemptions, adding $1.9 billion in technical selling pressure.
Watch for SpaceX's first quarterly earnings call as a public company, scheduled for late May. Management has not committed to regular cadence, but the SEC filing requires disclosure within 45 days of quarter-end. Any indication that Starlink's ARPU growth is decelerating—currently running at $103 per month, up 7% sequentially—will determine whether the stock finds support or tests $120. The xAI integration timeline will also matter: if revenue synergies do not appear by Q3, the acquisition's strategic rationale collapses into a tax-loss harvest for Musk's other holdings.
Meta took 463 days to reclaim its IPO price. SpaceX has been public for 91 days.