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Space Exploration Technologies (NASDAQ: SPCX) made history in June when it completed the largest IPO in history. It's been a wild ride for the space company since then. It opened at $150, meaningfully up from its IPO price of $135, and rose to as high as $225 in the following weeks. However, the stock has been mostly southbound recently, and at $109 as of writing, it is down 19% from its IPO price. Where will the stock go from here? Perhaps we can get a clue by looking at Tesla's (NASDAQ: TSLA) first year on the market. The other publicly traded corporation headed by Elon Musk bears some similarities to SpaceX. Let's dig in.
Image source: The Motley Fool.
Missed Nvidia in 2009? This Rare Signal Is Flashing Again. In 2009, a "Double Down" signal flashed for a little-known chipmaker called Nvidia. For the first time in years, that same "Total Conviction" signal is flashing for a company 1/100th the size of Nvidia. Continue »
Can SpaceX rebound like Tesla?
SpaceX took on the challenge of revolutionizing space travel. It used to be extremely difficult and expensive due to the use of disposable rockets. The company pioneered reusable rockets and helped significantly reduce launch costs. Now, it is the largest player in the field and continues to innovate. SpaceX is also deeply vertically integrated, which helps the company control costs. Tesla similarly moved the electric vehicle (EV) market forward through its vertically integrated approach, innovative battery technology, and EVs that could perform just as well as gas-powered cars. Tesla went public on June 29, 2010, and about two months into its life as a publicly traded company, the stock had declined by 18%.
TSLA data by YCharts
However, Tesla rebounded and had a respectable first year on the market, gaining 18% by the end of it, partly because of the company's plans to go beyond its first car, the Roadster -- a sports vehicle -- and to move into the mass-market category with the Model S, which it introduced in 2012. Can SpaceX also rebound and perform well through its first year on the market?
On the one hand, the space company is working on projects that should give investors confidence about the future. SpaceX's next-gen rocket, Starship, is fully reusable and can handle much bigger payloads than its current crown jewel, Falcon 9. That means lower per-launch costs, enabling the company to improve margins and profits. It will also help it launch far more satellites into orbit and expand its Starlink business, which provides internet connectivity via a network of satellites in Low Earth Orbit. Starship is still in testing and recently completed its 13th test flight.
