SPCX Stock Price Falls 10% Year-to-Date Despite Record Revenue — What’s Really Going On?
Space Exploration Technologies Corp. closed Wednesday at $145.23, down 2.25% for the day and more than 10% since the year’s beginning. The company is traded on the Nasdaq under the ticker SPCX. That kind of pressure merits a closer examination for a company with a $1.97 trillion market capitalization and 161% annual revenue growth. One thing is clear from the numbers. Another is said by the stock.
During T-Mobile’s earnings call, CEO Srini Gopalan firmly closed the door on any MVNO arrangement with SpaceX, which was the most immediate headline driving shares lower. His justification was pragmatic rather than antagonistic: T-Mobile’s requirements for mobile virtual network agreements call for additional capacity, new distribution, or new clients.
He believes that none of those are brought by SpaceX. It’s difficult not to interpret his comments as a little worn out, as if he’s been asked the same question too many times. He concluded by saying, “I see no room for an MVNO with SpaceX.” Verizon and AT&T have made similar statements. The CEO of Verizon went so far as to predict that it would take more than ten years and cost between $300 billion and $500 billion to build a competitive terrestrial network. That is a structural no, not a soft one.
SpaceX is reportedly in negotiations to gain access to at least 80,000 U.S. cell sites, including discussions with Crown Castle, and is still working toward that goal by purchasing 800 MHz spectrum. It’s a significant endeavor. A different question, and one that investors appear to be asking more and more urgently, is whether the timeline and capital needed make sense at the current share prices.
Alphabet’s Q3 results, meanwhile, gave the SPCX narrative a unique twist. About 550 million shares of SpaceX are owned by Google’s parent company. During the quarter, those shares fell from about $171 to $151, and Alphabet absorbed what it called a $11 billion unrealized loss on its investment. Even though operating profit increased by 30% and Google Cloud revenue doubled, Alphabet’s net income decreased by 25% year over year as a result of that decline. It was dubbed accounting noise by some analysts. Most likely, it is. However, it served as a subtle reminder that some of the biggest businesses in the world are now affected by changes in SPCX’s price.
SpaceX’s own Q3 results were impressive: $14.57 billion in revenue, earnings per share that exceeded projections by more than 12%, and revenue that exceeded projections by almost 239%. The business is actually expanding quickly. However, it appears that the market is more interested in what will happen over the next eight months than in what SpaceX made in the previous quarter. Restrictions on existing shares have been lifted since August, unlocking insider stock valued at over $559 billion. The shares were already included in the market capitalization, so that isn’t new supply, but it does mean that a lot more stock can now be sold. Furthermore, the largest unlock has not yet occurred. When Elon Musk’s own 366-day lockup expires in June 2027, approximately 6.4 billion shares that could be worth over $900 billion at current prices will become available. It is a remarkable number by all standards.
After being at very bullish levels a few days prior, retail sentiment on Stocktwits changed to bearish this week. In a single day, message volumes increased by 33%. Strong earnings, successful launches, and news of tower expansion, according to one trader, were insufficient to keep the stock up. Another was more measured, pointing out that SpaceX has $89.9 billion in cash compared to $38 billion in debt and describing the current decline as a chance to buy. Both points of view make sense. Because of this, reading about this specific period in SPCX’s history is actually challenging.
As the unlock pressure increases and carriers continue to obstruct the MVNO path, it is still unclear if the stock finds support in the $140s or keeps declining. The company itself appears to be doing well. The chart, not so much. Investors watching SPCX at the moment are essentially weighing the company’s short-term calendar, which is jam-packed with supply events, against the long-term mission. It’s not an easy wager, and the price is beginning to show how complicated it is.
