SpaceX shares have declined for a third straight day, bringing the stock perilously close to falling below its initial public offering price. This level is a crucial benchmark for traders and investors evaluating the performance of newly listed companies.

The stock fell 2.2% on Tuesday, closing at $136.08 per share. This leaves the share price just $1 above the $135 per share IPO price set last month. The rocket, satellite, and artificial intelligence company led by Elon Musk has now lost roughly a third of its value since its post-listing peak, erasing nearly $850 billion in market capitalization.

When a company's stock price falls below its IPO level within days or weeks of its debut, it undermines the optimistic narrative carefully constructed by the company and its underwriters. Inflicting losses on shareholders so quickly can damage market confidence, and some newly public companies struggle to recover from such an early setback.

Skeptics point out that SpaceX's forward price-to-sales ratio exceeds 30 times, ranking it among the highest in the Nasdaq 100 Index and slightly below that of Palantir Technologies Inc.. SpaceX also faces an extended lock-up period, with regular expirations scheduled over the coming months that will allow company insiders to sell their shares.

"We still do not believe SpaceX has found a bottom," stated Ken Mahoney, Chief Executive Officer of Mahoney Asset Management.