SpaceX Shares Drop 16% Amid Report of $20 Billion Debt Offering

SpaceX shares fell 16% on Monday, marking the third consecutive day of declines, after the company disclosed plans for a significant debt offering. The rocket company, founded by Elon Musk, is reportedly looking to raise approximately $20 billion through the sale of investment-grade bonds. This move is intended to fund costly artificial intelligence development and support long-term objectives, such as establishing data centers in space.

The company’s stock closed Monday at $154.60, resulting in a market capitalization of $2.03 trillion. Prior to Monday's drop, SpaceX had experienced declines of over 8% on both Wednesday and Thursday of the preceding week. The regulatory filing also indicated that SpaceX holds approximately $100.8 billion in cash.

SpaceX joins a growing number of major technology firms tapping into debt markets to finance ambitious AI initiatives. Companies such as Alphabet, Amazon, and Nvidia have recently signaled intentions to raise capital through debt offerings. Dan Ives, a managing director at Wedbush Securities, noted that while investors are showing caution regarding debt issuances, such actions are becoming common in the competitive AI landscape. He added that major tech players are undertaking substantial debt and equity raises to fund significant capital expenditures planned for the coming years.

SpaceX's initial public offering on June 12 was a record-setting event, which reportedly made Elon Musk the world's first trillionaire and raised nearly $86 billion. The stock debuted at $150 per share, instantly making it the largest IPO in history and pushing the company's valuation above $2 trillion. By the close of its first trading day, the stock had risen 19.6% to $192.45.

Retail investors played a notable role in the IPO's initial success, with Vanda Research reporting that individual traders purchased $405 million worth of shares in the first five trading sessions. These retail investors showed greater interest in SpaceX stock compared to the combined purchases across all Magnificent Seven stocks during the same period.

SpaceX has significantly impacted the space industry through its development of reusable rockets, which have reduced the cost of launching satellites. The Texas-based company also operates Starlink, a satellite internet service provider that has become a major government contractor and was the company's sole profitable division in 2025. Musk has articulated a long-term vision for SpaceX that includes enabling human colonization of Mars.

In February, Musk integrated SpaceX with his artificial-intelligence startup, xAI. Despite its ambitious goals and recent IPO success, SpaceX is experiencing a rapid cash burn. Last year, the company incurred a loss of nearly $5 billion, with annual capital expenditures reaching $20.7 billion. In the first quarter of the current year, SpaceX's spending escalated to $10.1 billion, with $7.7 billion allocated to AI, a substantial increase from the $4.1 billion spent in the same period last year.

Scott Martin, a partner at Kingsview Wealth Management, previously commented that investor enthusiasm for SpaceX stock was driven more by faith in Musk's vision than the company's current financial performance. He noted that investors are buying into the potential of Starlink, AI, space infrastructure, and the prospect of SpaceX dominating future industries, which leads to very high expectations.