SpaceX Shares Tumble 10% in Premarket Trade After 1st Earnings Report Since IPO 

Mumbai, Aug 5: Space Exploration Technologies Corp. (NASDAQ: SPCX) shares slumped in premarket trade on Wednesday, reversing a sharp rally from the previous session, after the company posted its first-ever quarterly earnings report since its record initial public offering in June. The stock fell even though SpaceX topped Wall Street’s revenue and earnings estimates for the second quarter, as investors focused instead on a sharp jump in capital expenditure tied to the company’s expanding artificial intelligence ambitions. 

SPCX was trading at $112.5026 as of 5:12 am ET on Wednesday, down $12.8274, or 10.23 per cent, from Tuesday’s closing level. The stock had closed Tuesday’s regular session at $125.33, up $10.80, or 9.43 per cent, on the day, as investors positioned ahead of the earnings release. In premarket dealings, buyers were bidding $112.50 for 680 shares while sellers offered stock at $112.55 for 200 shares, a tight spread even amid the sharp overnight move. Trading volume stood at more than 3.07 million shares in early dealings, reflecting heavy investor interest around the debut earnings print. 

The stock’s 52-week range spans from a low of $104.83 to a high of $225.64, a level touched shortly after its blockbuster June listing. Wednesday’s premarket slide marks a sharp reversal from Tuesday’s rally and leaves the stock well below both its IPO-era peak and its previous close. 

First Earnings Since IPO Beats Estimates, Capex Weighs 

According to CNBC, SpaceX reported better-than-expected revenue for the second quarter in the company’s first earnings report since its record IPO in June, though the stock had dropped about 8 per cent in extended trading on Tuesday as capital expenditure soared. Revenue came in at $7.81 billion against expectations of $6.93 billion, while the company posted a loss of 9 cents per share, narrower than the 26 cents per share loss analysts had projected. Revenue jumped 92 per cent from $4.1 billion a year earlier, the company said in a statement, while its net loss narrowed to $541 million from $1 billion in the year-ago quarter. 

It was the first time Elon Musk’s reusable rocket maker faced Wall Street in this capacity, and investors were said to be jittery. SpaceX lost $4.9 billion last year, largely on hefty investments in artificial intelligence infrastructure, after merging with Musk’s xAI in February with plans to build data centres in space. Even the launch business, which counts on large contracts from the US Defense Department and NASA, remained loss-making. Most of SpaceX’s revenue, and its only source of profit, came from its connectivity segment, comprising the Starlink satellite internet service sold to consumers as well as government and military agencies. 

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By segment, Space revenue came in at $962 million against expectations of $835 million, Connectivity revenue was $4.29 billion versus $3.83 billion expected, and AI revenue stood at $2.56 billion against $2.18 billion expected, according to CNBC, citing StreetAccount estimates. The Space unit posted an operating loss of $542 million and the AI division lost $1.26 billion during the quarter. Connectivity remained the only profitable segment, generating operating income of $1.66 billion in the period. 

Since opening at $150 on June 12, the day of its market debut, SPCX had already fallen 16 per cent as of Tuesday’s close, according to CNBC, even before Wednesday’s premarket slide extended those losses further. The stock’s post-listing volatility underscores how closely investors are scrutinising the pace of spending across the company’s newer AI and space businesses relative to the steady profitability of its Starlink-driven connectivity arm. 

Wednesday’s report also comes just a day ahead of a significant lock-up expiry for the company, when a large tranche of insider and employee shares becomes eligible for sale, a factor that could add to trading volatility in the sessions ahead. For now, the sharp premarket move suggests investors are weighing the earnings beat against the scale of capital commitments the company is making to expand its AI and orbital data centre operations. 

Source

•  Nasdaq
• CNBC