SpaceX falls 10% after record IPO and huge gains in 1st sessions

New York: After a record IPO followed by a sky-bound trio of sessions, shares of SpaceX started to come back down to earth on Thursday.

Near 1830 GMT, the rocket company and satellite operator stood at $178.94, down 6.7 percent after earlier losing around 10 percent. The company also fell on Wednesday.

Shares of SpaceX, which is also being positioned as a big player in artificial intelligence, had topped $225 on Tuesday when the company briefly overtook Microsoft to be the world's fourth most valuable company.

The gains have been fueled by investor zeal for SpaceX's growth potential and accentuated by the relatively limited number of shares available, analysts said.

Briefing.com analyst Patrick O'Hare described the decline as "just a normal pullback after what has been an accelerated run following the IPO."

The company, which reported a loss of $4.3 billion last year, has a longterm goal of developing data centers in space. Analysts do not expect profitability anytime soon.

Markets now await SpaceX' first earnings report. 

"They're going to have to now demonstrate to investors that they're delivering on these high expectations," O'Hare said. "And so everyone's going to have to wait for the first earnings report to see if it's matching with what this strong run has suggested it could be."

A note from DataTrek Research described SpaceX as an anomaly among equities, with a valuation above $2 trillion despite generating revenues dwarfed by those at Microsoft, Amazon and other comparably valued companies.

"SpaceX is what investment bankers and equity salespeople call a 'dream the dream' stock,' an investment with no real comps but plenty of potential, backed by a credible management team with a preliminary but very visible track record of success," said DataTrek. 

"It is worth whatever the market wants to believe, and its valuation is not constrained by recent financial performance."