SpaceX shares fell 3.57 percent Thursday, the second straight session of declines for Elon Musk's rocket-and-AI company, pulling its market capitalization back below Amazon a week after the largest initial public offering on record and hours after ProPublica published a private investor ledger showing at least a dozen people with addresses in mainland China, Hong Kong or Russia bought stakes before the listing.
The one-two of a cooling tape and a foreign-investor disclosure puts the post-IPO narrative in a different place than it sat on Tuesday, when SpaceX briefly traded above Microsoft and approached a $3 trillion market value. The Thursday close was $184.98 a share, against a five-day volume-weighted average price of $181.71 — meaning the typical investor who bought in the open market since the debut is now roughly breakeven, according to CNBC's calculation. Shares are 20 percent off Tuesday's intraday high above $225.
What the ledger shows
The ProPublica records, unsealed this month after the Delaware Supreme Court ruled against an appeal by the middleman firm Tomales Bay Capital, identify investors who acquired SpaceX stakes between 2018 and 2021 in amounts ranging from $800,000 to $40 million. One $15 million investment in 2020 came from an entity owned by David Su, co-founder of the Beijing venture-capital firm MPCi, whose portfolio includes two Chinese satellite companies later sanctioned by the U.S. government for allegedly aiding the Wagner Group. A separate $48 million in deals between 2017 and 2020 came through Bracket Capital, which ProPublica said holds money from the Qatari royal family. A Delaware shell called HAL9001 Partners Fund I, signed for by the venture capitalist Roman Sobachevskiy, invested roughly $10 million in 2020.
SpaceX barred investors from China and Hong Kong from buying into the IPO last week, citing what Bloomberg reported as "regulatory and compliance risks." The company built much of its business on classified U.S. government work, including spy satellites for the Pentagon, and foreign investment in U.S. military contractors is heavily regulated.
The Street recalibrates
The slide arrives as index providers prepare to fold SpaceX into the funds that hold most Americans' retirement savings. CRSP, Nasdaq, FTSE Russell and MSCI have each made accommodations to integrate the stock into their large-cap trackers this summer. SpaceX implied volatility was near 120 on Tuesday, roughly three times the level of the iShares bitcoin ETF and the highest of any trillion-dollar company in the S&P 500 or Nasdaq 100. "Vanguard and other large money managers who are going along with Nasdaq's mandate and rule change are betraying U.S. savers," Ayman Saidi, a partner at Strategic Investment Solutions in Orland Park, Ill., told CNBC.
The company on Wednesday added Roelof Botha, a longtime Musk ally, to its board as an independent director and audit-committee member, the eighth seat at a company where Musk controls more than 82 percent of voting rights and holds shares worth over $1 trillion. Other billionaire holders include Valor Equity Partners, sitting on a $96.6 billion position; SpaceX President Gwynne Shotwell, with a $2.4 billion stake; and Chief Financial Officer Bret Johnsen, at $1.2 billion. Luke Nosek, a PayPal co-founder who has served on the SpaceX board since 2008, holds $6.3 billion.
The counter
A lawyer for Tomales Bay Capital, Ryan Stonerock, told ProPublica the firm "has not provided any non-public, sensitive information regarding SpaceX to investors" and said its limited partners receive only quarterly valuations. MPCi said in a statement that Su "has not received any nonpublic information of SpaceX" and described him as a Singapore citizen. SpaceX did not respond to ProPublica's questions. Sarah Bauerle Danzman, an Indiana University professor who has worked for the State Department reviewing foreign investments, told ProPublica the relevant test is access to nonpublic information: "If an investor has conflicts of interests with other companies in China — if they could feed that information to competitors — it could be a national security concern."
Markets are closed Friday for Juneteenth. The insider lockup, the next scheduled inflection point for the float, runs past summer index inclusion.