SpaceX Shares Fall Below IPO Price: A Contrarian Buy Worth Considering
SpaceX stock is down 45% from its highs and trades below its IPO price. Is this the contrarian buying opportunity patient investors have been waiting for?
Overview
A few weeks ago, Space Exploration Technologies (NASDAQ: SPCX) was the most hyped stock on the market. Now it has quietly slipped below its $135 offering price, trading around $124 and down roughly 45% from its post-debut high near $226. For most investors, that kind of round trip is a warning. For contrarians, who like to buy what everyone else is fleeing, it is an invitation to take a closer look.
The slide has more to do with the mechanics of hype than with anything broken inside the business. SpaceX popped on its debut, then got swept into a major stock index, which forced index funds to buy the shares. Once that mechanical demand was satisfied, the buying dried up, momentum reversed, and the stock drifted back below where it started. A scrubbed Starship test flight added to the gloom. In other words, the froth came out, but the company that raised the money is the same one it was a month ago.
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Originally published at www.fool.com.