SpaceX Starship Failures|Falls Below 135 IPO Price

The Abort at Zero

SpaceX stock closed at $131.11 on Thursday, dropping below its $135 initial public offering price for the first time since the company went public in June. The trigger was a last-second launch abort of Starship Flight 13, called off after several of the rocket's Raptor engines failed to ignite at the pad.

The failure is the second flight setback since SpaceX's stock market debut, after the May test already ended with the booster plunging into the Gulf of Mexico following an engine outage. The immediate question is whether Starship's reliability problem is now the single variable deciding whether this record-breaking IPO stock is a bargain or a broken thesis.

That reliability question is the bottleneck this video traces, not the stock's valuation math, but whether SpaceX can prove Starship works before the market decides the IPO story was hype. Wall Street's own price targets, as high as $259 to $282 a share, assume Starship's launch cadence keeps climbing, an assumption two straight failures have not yet broken, but have not confirmed either.

Two Failures, One Pattern

Thursday's abort was not an isolated glitch. In May, the first flight of this upgraded Starship V3 rocket suffered a string of engine outages that kept the booster from returning safely, sending it into the Gulf of Mexico instead of a controlled landing. Two consecutive flights of the same hardware generation have now failed at the exact stage investors are told will define SpaceX's next decade.

Even as the stock slid, positioning diverged sharply among investors watching the same chart. Cathie Wood's ARK bought roughly 147,805 additional SpaceX shares into the selloff, while short sellers built a position of about 185 million shares, close to 29 percent of the tradable float, worth an estimated 25 billion dollars in bearish bets.

Short sellers are already sitting on an estimated 8.7 billion dollars in paper profits, and short-seller Jim Chanos has separately argued the company's valuation is too high given the 4.9 billion dollars in losses SpaceX disclosed ahead of its IPO. On the other side, UBS kept a buy rating and a 210 dollar target just days before the failed launch, calling the flight a chance to prove multiple new hardware milestones.

The Assumption Under the Target

Here is the assumption the bull case leans on without saying it out loud: every price target above 200 dollars treats Starship's launch cadence as something that simply resumes on schedule. Two failures in three months are the first live data suggesting that assumption is not guaranteed, yet none of the published targets have moved to reflect that risk.

The stakes reach beyond SpaceX itself. Strategist Mark Hulbert has warned that the combined weight of the SpaceX, OpenAI, and Anthropic IPOs could be enough to tip broader equities into a drop of close to 40 percent, citing research on how oversized new listings drain capital from existing holdings. A stumbling Starship program would remove the one narrative that was supposed to justify SpaceX absorbing that much investor cash.

There is a genuine counterweight to the bear case worth naming before any conclusion: SpaceX's Starlink division alone posted 1.19 billion dollars in operating profit last quarter and could reach 20 billion dollars in annual revenue this year, a cash engine that keeps running regardless of what Starship does next. That gives the company room to absorb a delayed relaunch without the balance-sheet stress some newly public firms face.

What Decides It

The variable that actually discriminates between the two theses is not the next earnings call, it is the rescheduled Starship relaunch, which Musk says could come as early as next week once two Raptor engines are replaced. A clean liftoff and stage separation would answer the reliability question the bulls have been assuming; another abort or in-flight failure would hand the short sellers their proof.

For anyone already holding shares, the signal is a successful engine startup sequence and a completed burn on the next attempt, which would validate the cadence assumption behind the 259 to 282 dollar targets and turn the current drawdown into an entry point instead of a warning. For anyone still on the sidelines, a second consecutive abort or another engine outage during ascent would confirm the short sellers' 29 percent float bet and mark the stock a trap dressed as a discount.

Nothing here is a call to buy or sell SpaceX stock; it is a single checkpoint to watch before either side of that trade is right. Before the next Starship attempt clears the pad, both the bull target and the short position are unproven, the launch itself, not the price chart, is what the market should be watching next.