Prediction: SpaceX Stock Will Fall After Aug. 4
Is the recent IPO's honeymoon period finally over?
Overview
Space Exploration Technologies (NASDAQ: SPCX) has been volatile since it pulled off the largest IPO in history last month. The stock reached a high of about $225 -- well above its IPO price of $135 -- but has now declined slightly below $112, as of writing. Has the space company bottomed out? Hardly. SpaceX will release its second-quarter update on Aug. 4, and there is a good chance the stock will fall even further.
Image source: The Motley Fool.
IPOs often trigger significant excitement from investors looking to get in on promising companies early in their public lives. That can send their share prices soaring. There are other factors at play, too. For instance, IPOs often surge because only a small fraction of shares are initially available, so strong investor demand can quickly drive the stock price higher. However, unless a newly public company impresses the market with its financial performance, it may not maintain its early momentum for long.
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Originally published at www.fool.com.