SpaceX hit by surging AI costs as insiders prepare to sell their shares
NBC News · LC · trust 58/100
The company reported revenues in its first-ever quarterly update as a public company that the surpassed analysts’ expectations. Most of its revenues came from its Starlink satellite offering.
But investor focus turned to capital expenditures related to its xAI unit, which runs the Grok AI service. Those hit $15.8 billion, higher than expectations of $13.09 billion according to Bloomberg News data and about double the previous quarter. The AI spending also comprised most of SpaceX’s overall $18.4 billion quarterly spending on cap-ex.
The report caused SpaceX shares to reverse a healthy run-up during regular trading hours Tuesday. The stock fell some 6.5% in trading after the closing bell, after having surged 9% earlier.
Tesla CEO Elon Musk. Patrick Pleul / AFP via Getty Images file SpaceX immediately became a multi-trillion-dollar company after a record-setting IPO on June 12 — but nearly just as quickly, it erased $1 trillion in value as the stock plunged amid anticipation of insider stock sales and broader jitters about the pace of AI spending.
Still, the company continues to enjoy a market valuation of more than $1 trillion, making it one of the most valuable companies in the world. The stock got an additional boost Tuesday after announcing a new deal with Nvidia that will see the two companies partner on a future satellite project.
Investor speculation has grown that SpaceX may attempt to merge with its sister company, Tesla. This would give Elon Musk even more control over his multi-faceted technology empire than he already exerts.
The vast majority of SpaceX’s stock is privately held, with just 5% of the 13.9 billion shares trading on the open market.
Along with Musk, who owns about 42% of them, these other shareholders are known to regulators as “insiders,” and have been barred so far from selling their shares.
This “lockup period” will expire Wednesday, at which point up to 20% of the total SpaceX shares held by insiders may be sold on the open market.
More shares on the market equals more supply, which means the price per share is likely to fall further.
But some retail investors aren’t concerned by the steep drop in SpaceX’s share price.
Forde Todd, 20, received three shares of SpaceX stock as part of the company’s initial public offering, then bought and sold several more on the open market.
Todd told NBC News he plans to keep holding onto his IPO shares despite the stock‘s plunge.
“I’m in it for the love of the game — like I’m in it for SpaceX,” said Todd. “I truly believe in this company.”
“At the end of the day, everybody is going to want a part in the space economy,” he added.
Rob Wile Rob Wile is a Pulitzer Prize-winning journalist covering breaking business stories for NBCNews.com.
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