TradingKey - On Monday, SpaceX ( SPCX) fell over 5% intraday to a low of $137.5, coming close to breaking below its IPO price of $135. It has declined nearly 40% from its peak of $225.64 on June 16.

Following Apple's recent lawsuit against OpenAI, SpaceX founder Elon Musk and OpenAI CEO Sam Altman traded barbs on social media.

Musk initiated the exchange on X, calling out Altman directly: "After stealing an open-source AI charity, now you've stolen Apple's phone technology! What are you going to do next?"

Altman fired back, mocking Musk: "You're the one who is actually peddling short-term space data center concepts to public market investors."

[Source: TradingView]

Meanwhile, hedge fund manager George Noble recently reiterated his extremely bearish stance, with the core concern centered on the upcoming massive insider sell-off. According to Noble's calculations, starting after the release of the second-quarter earnings report, insider share lockups will expire in phases. By early September, insiders could sell up to approximately 44% of the company's shares, at which point outstanding shares will surge by about 900%. These shares were acquired at an extremely low cost, presenting a huge incentive for profit-taking.

Noble pointed out that the scarcity of SpaceX in the private market prior to its listing was the core factor supporting its high valuation. Following the IPO, this scarcity vanished, and the previously artificially engineered 'short squeeze' subsequently reversed.

He stated that SpaceX has never achieved annual profitability since its inception, with last year's full-year loss alone reaching approximately $5 billion. The price-to-sales (P/S) ratio at the offering price already exceeded 90 times, and at the peak of stock speculation, the market once gave it a P/S valuation of nearly 140 times. The severe decoupling of fundamentals from valuation began to drive the stock's correction. Now, the stock has erased all gains from the previous short squeeze and has even fallen below its opening price on the first day of trading.

Currently, market opinions on SpaceX are highly divided. Buy-side analysts have issued price targets, generally optimistic about the company's long-term valuation potential. However, value investors, represented by Noble, believe that the company lacks fundamental support from profitability, making the lofty stock price and valuation multiples completely untenable.

Noble said Starlink is SpaceX's only continuously profitable business, but this business alone is insufficient to support the company's current market value. He estimates the fair valuation of SpaceX to be around $30 per share and called the company 'the most severe large-cap valuation bubble I have ever seen.'

It is worth noting that the company's persistent losses may prevent SpaceX from being included in the S&P 500 Index for several years.

Market analysis suggests that behind this round of rapid stock price swings, structural defects in the public float are the core driving factor. In this IPO, the company released only about 4.24% of its shares as public float, making outstanding market liquidity extremely scarce. The tiny float, combined with frenzied investment demand in the early stages of the IPO, jointly fueled the skyrocketing run at the start of its listing.

However, as speculative market enthusiasm gradually subsides, coupled with the dilution of existing shareholders' equity resulting from the company's all-stock acquisition of Cursor, selling pressure has quickly accumulated as a result.

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