Why SpaceX Stock Plummeted 28% This Week

SpaceX's privately-traded shares declined 28% over the trading week ending June 27, 2026. The sharp sell-off followed a June 24 announcement from the FAA regarding the catastrophic loss of a Starship prototype during a high-altitude re-entry test. A secondary funding round for employees at a reported valuation of $205 billion was postponed indefinitely. The price move erases gains accrued since February 2026 and marks the most significant weekly decline for the space venture since its 2024 correction.

Context — why this matters now

The immediate catalyst was the Federal Aviation Administration's statement confirming the in-flight breakup of Starship vehicle IFT-10 over the Gulf of Mexico. This test was a critical step toward demonstrating orbital reusability, a cornerstone of SpaceX's long-term financial model for lunar and Mars missions. The failure directly impacts the company's contracted timelines with NASA for the Artemis lunar lander and the U.S. Space Force for point-to-point cargo delivery.

Historically, SpaceX's valuation has weathered technical setbacks, including the 2015 Falcon 9 explosion and the 2020 Starship SN8 crash. However, the current macro backdrop of elevated interest rates and tighter private market liquidity amplifies the scrutiny on capital-intensive, long-duration projects. The last comparable valuation shock occurred in September 2024 when a Starlink satellite launch anomaly triggered a 15% single-day decline in secondary market shares.

The significance lies in the test's objective. Success would have validated the heat shield and flight control systems needed for safe return from orbit. The failure now introduces a probable delay of 12-18 months to the Starship program, based on the investigation and redesign cycle following the IFT-9 incident in late 2025. This delay cascades into revenue projections for satellite deployment, NASA milestones, and future fundraising.

Data — what the numbers show

The sell-off pushed SpaceX's implied valuation from a pre-event high of approximately $285 billion to around $205 billion, based on delayed secondary market transactions. This $80 billion loss in market capitalization exceeds the entire current valuation of competitor Northrop Grumman. The 28% weekly drop contrasts sharply with the performance of the S&P 500 Aerospace & Defense Select Industry Index, which was flat for the same period.

Secondary market data from platforms like Forge Global showed bid prices collapsing from $135 per share to $97. Average daily trading volume spiked 450% above its 30-day average. The implied valuation shift can be compared directly to key public peers:

Company	Market Cap	YTD Performance
SpaceX (implied)	~$205B	-28% (week)
Boeing	$118B	+5%
Lockheed Martin	$112B	+3%

Internal projections cited in pre-event fundraising documents targeted a Starship operational date in 2028. Analysts now estimate that timeline could slip to 2030. The company's launch manifest lists over 100 contracted Starship missions, primarily for its own Starlink Gen2 constellation, valued at over $10 billion in future revenue.

Analysis — what it means for markets / sectors / tickers

The immediate second-order beneficiary is United Launch Alliance (ULA), a joint venture of Boeing and Lockheed Martin. ULA's heavy-lift Vulcan Centaur rocket, while less powerful, is now seen as a more reliable near-term option for critical national security payloads. Shares of BA and LMT gained 2.1% and 1.7%, respectively, on the news as investors priced in reduced competitive pressure.

Satellite operators like Planet Labs and Astra Space also face headwinds. Delays in Starship's high-volume, low-cost launch capacity directly increase their future capital expenditure timelines for constellation deployment. Conversely, launch service providers with near-term capacity, such as Rocket Lab, saw increased investor interest, though their smaller scale limits direct substitution.

A key counter-argument is SpaceX's diversified cash flow from its operational Falcon 9 and Starlink businesses. Starlink reportedly achieved positive free cash flow in Q1 2026 and serves over 3 million customers. This revenue stream provides a financial cushion absent during prior development setbacks. However, the valuation premium was largely predicated on Starship's disruptive potential, which is now in question.

Positioning data indicates venture capital and late-stage private equity funds that hold large SpaceX positions were net sellers, locking in gains from earlier entry points. Flow moved toward established defense primes and niche public companies in satellite components and propulsion, which are seen as less exposed to single-project execution risk.

Outlook — what to watch next

The primary near-term catalyst is the FAA's final mishap investigation report, expected by September 30, 2026. Its findings on the root cause—whether thermal protection, structural, or guidance-related—will determine the scope and cost of the redesign. A second catalyst is NASA's Artemis program review, scheduled for late July 2026, which may formally adjust schedule assumptions for the Human Landing System.

Key levels to watch are SpaceX's next attempted employee liquidity round. A successful raise at or above the $205 billion level would signal valuation support. A raise below that mark or a further postponement would confirm ongoing downward pressure. For public peers, monitor the 50-day moving average for LMT and BA; sustained breaks above could indicate a structural re-rating.

The conditional outlook hinges on the next integrated flight test. If SpaceX can return to flight with a modified vehicle before year-end 2026, sentiment may stabilize. A longer grounding or a subsequent failure would likely trigger further valuation compression and intensify investor focus on Starlink's standalone profitability to justify the current price.

Frequently Asked Questions

Is SpaceX a publicly traded stock?

No, SpaceX remains a privately held company. Its shares are traded on regulated private secondary markets like Forge Global and Nasdaq Private Market, accessible primarily to accredited institutional investors and qualified employees. The price action discussed reflects bids and offers on these platforms, which provide the clearest public proxy for the company's valuation but lack the liquidity and transparency of a major public exchange like the NYSE or Nasdaq.

How does this affect Tesla stock?

The impact on Tesla is indirect but material due to the shared leadership of Elon Musk and investor perception linkages. Tesla shares declined 4.5% in the two days following the SpaceX news, underperforming the Nasdaq. The concern is twofold: first, that Musk's attention may be further diverted to the Starship crisis, and second, that negative sentiment around execution risk at one of his flagship companies could spill over. Historically, correlations between the two entities' perceived fortunes have been observed during major SpaceX events.