Author｜Jia Liu, BeatZ News

A recent gossip from the Silicon Valley circle, apart from Oracle's founder Ellison shopping with his sixth Chinese wife in Newport Beach, Los Angeles, is that former world's richest man Musk, after the drop in SpaceX's stock price, has once again become immersed in "Elden Ring."

This is not Musk's first time throwing himself into a game during a high-pressure period. In 2022, after deciding to acquire Twitter, he played "Elden Ring" in a Vancouver hotel until 5:30 a.m. This was mentioned by Musk's ex-girlfriend and later written in the "Musk Biography."

And this time, Musk's anxiety comes from the sharp decline in SpaceX's stock price.

On the first day of its IPO on June 12, SpaceX closed at $161, with a market value exceeding $2.1 trillion, directly entering the top six in the US stock market. Four days later on June 16, it reached a historical high of $225.64 during the trading day, with a market value reaching $2.94 trillion, briefly surpassing Microsoft. Musk's net worth that day reached $1.45 trillion, making it the richest moment in recorded human history.

However, seven weeks later today, the stock price has dropped from the high of $225.64 to $114, nearly halving, with a market value evaporation of about $1.2 trillion, and Musk's personal net worth evaporating over $750 billion.

People around Musk say that he has been super addicted to playing "Elden Ring" recently, even asking employees to play for him, and he is even playing the game during meetings. It is common for him to swear at employees during meetings. He often holds late-night meetings and is even late or doesn't show up. There have even been instances where meetings scheduled for 8 p.m. are delayed until two in the morning, with people still waiting for him.

While we cannot confirm the veracity of this information, Musk's anxiety this week has indeed reached its peak, as SpaceX's first-quarter financial report was released on Tuesday, coinciding with this Thursday's first large-scale unlock day.

Who Bears the $1.2 Trillion Evaporation

On June 16, SpaceX, which had been listed for 4 days, saw its market value reach $2.94 trillion at one point.

However, the good times did not last long. SpaceX, with a low float and a high valuation, experienced a unilateral decline for 51 days. As of today, SpaceX's market value has evaporated by about $1.2 trillion.

The most affected should be Musk himself. He owns about 4.8 billion shares of SpaceX, plus 350 million options with a strike price of $8.40, and about 700 million shares of Tesla.

On June 22, SPCX dropped by 16.4% in a single day, causing him to lose $152 billion. On July 1, his net worth fell below $1 trillion, officially losing his trillionaire status. On July 16, the Starship launch was aborted, leading to another loss of $45 billion in a day. By July 27, his net worth had dropped to $695.7 billion. In five weeks, Musk's wealth evaporated by about $750 billion, surpassing the combined net worth of the second and third richest individuals in the world.

However, the most "silent sufferers" are the millions of American retirement account holders who have never placed a buy order for SpaceX.

On July 7, SpaceX was included in the Nasdaq 100 Index. Under the old rules, newly listed companies had to wait for a three-month "seasoning period" to be eligible. Nasdaq specifically modified the rules for SpaceX: companies with a total market value exceeding that of existing constituents can skip the waiting period. SpaceX was included in the index after only 15 trading days, making it the fastest inclusion in the history of the Nasdaq 100.

J.P. Morgan estimated that just one ETF tracking the Nasdaq 100, the Invesco QQQ Trust Fund with assets under management of about $480 billion, generated approximately $4.3 billion in passive buy demand. Adding up all products tracking the Nasdaq 100, which exceed 200 in total with assets under management of about $800 billion, the total passive fund flow ranged from $22 billion to $27 billion. Most of this money entered the market around the close on July 6 and the open on July 7, when the price of SPCX was in the range of $157 to $161. By July 22, QQQ held 39.7 million shares of SPCX, with a market value of $4.57 billion and a portfolio weight of 0.98%.

In other words, millions of 401(k) holders became SpaceX shareholders at around $160 per share. And they added a stock to their portfolio that has a net loss of $4.9 billion expected by 2025, a price-to-sales ratio of over 115 times, and has been listed for less than a month. As of the closing price on August 3 of $114.53, their unrealized losses are about 28%.

And this decision to buy was not made by them.

What Exactly Is SpaceX Today?

On February 2, 2026, SpaceX acquired Elon Musk's AI company xAI in an all-stock deal, valuing it at $250 billion, with a post-merger entity valuation of $1.25 trillion. In May, Musk announced that xAI would no longer exist as an independent company. On July 6, it was officially rebranded as SpaceXAI. The trademark application listed: satellite data centers, orbital compute services, AI software. Musk's rationale was that the global AI power demand is "fundamentally impossible to meet with ground-based solutions," making moving data centers to space the "only logical solution." SpaceX has applied to the US Federal Communications Commission to deploy up to 1 million AI satellites.

Adding to this is Cursor. On June 16, the day the stock price hit its peak, SpaceX announced the exercise of pre-acquired options to acquire Anysphere for $600 billion in an all-stock deal, the parent company of the AI programming tool Cursor. This marks the largest venture-backed startup acquisition on record. The acquisition aims to integrate Cursor's programming data into the training pipeline of the large-scale model Grok, while allowing Cursor to utilize xAI's Colossus supercomputing cluster.

Therefore, a rocket company, using newly public shares, bought an AI programming tool to train a large model running in a data center it is preparing to launch into low Earth orbit.

Following this, SpaceX not only needs financing for rockets, satellites, and ground networks but may also need to provide capital for Musk's broader technological ambitions within the system. The issue is that its balance sheet is not light.

According to the IPO prospectus figures: full-year revenue in 2025 was $187 billion, with a net loss of about $49 billion. First-quarter revenue in 2026 was $46.9 billion, with a net loss of about $43 billion and capital expenditures close to $100 billion. AI-related expenses accounted for 61% of capital expenditures in 2025, rising to about 76% by early 2026. Capital expenditures for the full year 2025 were approximately $210 billion, spending more than earning. Looking ahead, analysts unanimously expect capital expenditures to reach $487 billion in 2026, rising further to $1.184 trillion in the 2028 fiscal year, with debt expected to grow more than fivefold in the same period, soaring from $41.7 billion to $218 billion.

So what exactly is SpaceX today?

It can be said that this is not a company that builds rockets and satellite internet, but an AI infrastructure company. Musk is using Starlink's subscription cash flow and his own stock to pay the bill for AI computing power.

Meanwhile, the internal situation in the AI division is far worse than those previous rumors.

Bloomberg Businessweek published an investigation on July 16 based on interviews with over a dozen insiders and internal documents. Earlier this spring, Michael Nichols, a senior executive who had long been in charge of the Starlink project, was appointed as the xAI President to take over this division. Musk gave him only one task: catch up to Anthropic's Claude. Every time Claude updates, Musk has to keep up with Grok. Several internal projects are directly named after Claude, and there are several Slack channels named after competitors' products. Nichols' onboarding memo stated: the immediate goal is to match Claude's performance and make Grok "maximally useful."

However, Nichols inherited a mess. After the merger, dozens of employees resigned, including several co-founders. A plan in March to lay off up to 30% of the staff resulted in people being dismissed without anyone being notified. Recruitment also came to a standstill in chaos, with candidates hearing nothing after interviews because the HR department was so short-staffed that even processes couldn't be completed. The pretraining team was reduced to fewer than five people at one point. The list of departures also includes the head of post-training and a co-founder who joined just months ago from the French AI company Mistral. Some employees began to doubt Musk's judgment, believing that someone who made his name in cars and rockets was a complete novice in large-scale models.

A follow-up report by the U.S. tech investigative media The Information was more definitive: all 11 original co-founders of xAI have left. Over 50 researchers and engineers flowed to Meta and the emerging AI research company Thinking Machines Lab. After the exodus of the co-founding team, the company's structure remained in a state of near-constant flux, with Musk at one point personally managing dozens of direct reports.

For a company planning to spend $118.4 billion in capital expenditures by 2028, the core research team of the AI division has already emptied out, the CEO is overseeing dozens of people directly, and this CEO is also managing a rocket, satellites, a cash-flow-negative car company, and a social media platform.

First Earnings Report Meets First Round of Large-Scale Unlocking

After market close on Tuesday, August 4, SpaceX released its first quarterly earnings report since going public. This was Wall Street's first glimpse of the complete operating data of the company.

Let's first look at the various institutions' expectations for SpaceX's performance this quarter.

The consensus revenue expectation for Visible Alpha, a subsidiary of S&P Global, is $69 billion; Bloomberg's consensus expectation is $68.1 billion; Zacks' consensus expectation is $67.2 billion; and Koyfin's data is $68.2 billion. These figures center around $68 billion, implying approximately a 15% year-over-year growth and a significant quarter-over-quarter leap from the previous quarter's $46.9 billion. While this sounds good, what the market is waiting for is not just growth itself, but whether the growth can accelerate.

On the loss side, the various estimates range from a loss per share of $0.22 to $0.26, with Koyfin expecting an adjusted EBITDA of about $20.5 billion. The full-year 2026 expected loss per share is $0.64, with a potential turnaround to positive earnings of $0.63 per share expected in 2027.

More important than the total figure is the segment structure. SpaceX currently has three major business segments: Starlink satellite internet, Falcon and Starship launch services, and AI computing power with the Grok large model. The market expects Starlink's operating profit margin for this quarter to reach 35.9%, with its earnings offsetting the operating losses of the launch and AI segments. Analysts also predict that Starlink's revenue in the third quarter will grow by over 50% year-on-year to $4.7 billion.

In other words, for a company with a market value of $1.4 trillion, the entire valuation story is still solely based on the Starlink business alone.

But there are cracks in the Starlink story itself. As of the end of the first quarter, Starlink had approximately 10.3 million subscription users in about 164 countries worldwide, doubling year-on-year, showing rapid growth. However, the issue lies in the fact that the average monthly revenue per user has decreased from $86 a year ago to $66. The management has stated that as Starlink expands into overseas and lower-priced markets, this number will continue to decline.

Prior to the first earnings report, the disparity among brokerages on SpaceX had already reached almost absurd levels. After a company goes public, underwriters have a quiet period (this time until July 7th), after which analysts can officially release coverage reports. The target price is the analyst's future 12-month expected stock price based on their own valuation model, not a prediction of financial reports, but a judgment of the company's long-term value. On July 7th, several banks simultaneously published their initial coverage reports, and when the results were announced, the market realized how extreme the differences were.

Brian Gesuale, an analyst at the U.S. investment bank Raymond James, gave the highest target of $800, stating that SpaceX is "one of the most defining industrial infrastructure companies of the 21st century," with the core logic that Starship can dramatically reduce orbital launch costs. Morgan Stanley's chief analyst Adam Jonas set it at $300, based on the long-term outlook for a $3.3 trillion revenue in 2040. Goldman Sachs analyst Eric Sheridan set it at $205. Other targets include JPMorgan at $225, Bank of America at $235, Wells Fargo at $230, UBS at $210, Citigroup at $200, Macquarie at $250, and Royal Bank of Canada at $225.

The Bearish Side: HSBC initiates coverage with a 'Hold' rating and a target price of $115, below the $135 IPO price. CFRA, an independent research firm under S&P, directly assigns a 'Sell' rating with a $115 target price, citing an "extremely aggressive growth strategy, overly high valuation expectations, and significant capital intensity." Morningstar, one of the world's largest independent investment research firms, offers an even lower fair value estimate of only $62, which is less than half of the IPO price.

A total of 23 banks participated in this IPO, with 18 of them providing target prices. The median is $225, with an average of around $237. The range spans from a low of $62 to a high of $800, a difference of 13x. However, with the current stock price hovering around $114, it remains well below the sell-side median.

It is evident that this group of individuals most knowledgeable about SpaceX cannot even reach a consensus on its fair valuation range.

As for Tuesday's SpaceX call,

Morgan Stanley's Chief Analyst Adam Jonas listed several key points he will be listening for in the latest report: whether SpaceX plans to add more than 2 gigawatts of computing power next year, if there are any new large-scale cloud computing partnerships, the trend of Grok's usage on Cursor, and the annual growth rate of Cursor's recurring revenue. He also highlighted three risks: if the capital expenditure guidance significantly exceeds around $500 billion, another fundraising round before year-end, and a slowdown in Starlink user growth. The first point is almost certain to occur.

SpaceX has also launched a dedicated Q&A solicitation page built by its in-house AI chatbot Grok, where the public can submit questions and vote, following Tesla's pattern of using Say Technologies to gather shareholder questions. From the largest U.S. forum community Reddit and retail investor community Stocktwits, the most concentrated demands from retail investors are twofold: whether the management will provide detailed data on segmentation for the first time, and if there will be any form of reassurance regarding Thursday's lockup expiration.

The First Batch of Shareholders Can Finally Sell

On Thursday, August 6, SpaceX's first lockup expiration arrived.

Differing from the traditional 180-day lockup expiration, SpaceX implemented a staggered release to spread the supply over several months, avoiding a single-day cliff drop. The first tranche's trigger was the second full trading day after the second-quarter earnings report. The target audience was employees and some early investors, with a release of up to 20% of their restricted shares, totaling a maximum of 9.115 billion shares.

This number is more than 50% higher than the total number of shares sold by SpaceX in its IPO, which included approximately 629 million shares, including the greenshoe.

Another striking comparison: the current market value of all freely tradable SPCX shares is around $860 billion. Based on $114.53, the shares available for sale on this day exceeded $104 billion. In other words, the tradable shares flooding into the market on this day exceeded the entire existing float in the market. $104 billion needs to find counterparties in an $860 billion pool.

In terms of ownership composition, employee shares are released in five tranches of 7% each on the 70th, 90th, 105th, 120th, and 135th days after listing. Musk himself and several undisclosed large institutional holders have signed a 366-day lock-up agreement valid until June 12, 2027.

For a software engineer who joined in 2019 with a single-digit exercise price, selling at $114 still results in returns of several tens of times. What he needs to consider are a down payment for a house, tax planning, and concentration risk. There are wealth management institutions specifically providing services to SpaceX employees, reminding them that the deadline for selling corresponding to the prepayment tax in August is September 15.

One firm that has explicitly stated it won't sell is the U.S. large tech investment fund Coatue Management. One of their investors said in a CNBC interview, "I will hold onto it," and added a memorable phrase: the biggest mistakes he has made have all come from optimizing for the short term. He cited Nvidia as one of the significant mistakes he made when he sold it in the past.

ARK Invest founder Cathie Wood, known as "WoodSis," bought the dip at SpaceX, equivalent to the entire market value of Tesla.

One of the most well-known value investors in the Chinese investment community and the founder of Puxin Limited, Duan Yongping, also made a move at this juncture. On July 23, he shared his transactions on Snowball: sold a bear put option with an exercise price of $115 on SpaceX and received a premium of $23.26. This means that if SpaceX falls below $115 at maturity, he will acquire it at $115, minus the premium already received, with an actual cost of $91.74. As long as it does not drop below $92, he will not incur a loss. If the stock price is still above $115 at maturity, he will profit from this premium, with a five-month return rate of 25.35% and an annualized rate of approximately 60%.

The most systematic warning comes from former SEC Chairman Gensler. He calls the upcoming event a "great rebalancing" and his exact words were: "All those venture capitalists and sovereign wealth funds will want to take risk off the table." He estimates that investors might reduce their exposure by one-third, half, or even three-quarters, creating a substantial amount of selling pressure. His probability assessment is that looking back in six months, this IPO wave might be okay, but an even greater likelihood is triggering systemic selling due to the lock-up expiration.

It is worth mentioning that Michael Burry, known for his bet against the subprime mortgage crisis in "The Big Short," once researched SpaceX but ultimately decided to pass. CNBC's popular host Jim Cramer gave a very simple assessment on July 28: If you want to buy, you can start with a small amount. However, if you plan to buy heavily, wait at least until Thursday's first wave of unlocking to let it push the price down a bit. He added a piece of wisdom to remember for the week: Generally, when supply increases, prices decrease.

However, two variables were severely underestimated this week.

On Wednesday, August 5, the July ISM Non-Manufacturing Index was released with a market expectation of 54.5. On Friday, August 7, the July non-farm payroll report was released. The unlocking day on August 6 happened right between these two macro data releases.

The Wednesday data came in stronger, leading to a shift in rate cut expectations and an increase in long-term rates. For a company with negative free cash flow relying on financing to sustain capital expenditures, a rise in rates directly impacts valuation, amplifying unlocking selling pressure. If the Wednesday data had been weaker, warming up rate cut expectations, growth stocks would have benefited overall, and the unlocking impact might have been diluted. However, Friday's non-farm payroll report was the real double-edged sword: Strong data pushed rates higher, while weak data triggered recession concerns, putting pressure on high-volatility growth assets.

For a type of asset like SPCX that is both a growth stock and asset-heavy, the two directions of macro data were not very friendly. What it needs is a neutral stance, which happened to be the least likely outcome for both data releases within a week.

Wall Street's renowned strategist Tom Lee has already warned that the Nasdaq and S&P 500 may see a bear market-like trend in the second half of 2026. One of the headwinds he mentioned is SpaceX's unlocking. When a heavyweight stock's share structure change can be written into the market outlook, this event is no longer just about a single stock.

Of course, there is also a possibility that the negative factors for SpaceX have already been priced in. In 51 days, it has dropped by 52% without any major negative operational news. The Starship successfully completed a test launch on July 24. The main driver of this decline has been the anticipation of unlocking itself, as the market has already priced in the selling pressure. If the Tuesday earnings report provides segment clarity, Starlink's profitability is validated, and if the actual selling scale on Thursday is lower than expected, the resolution of this suspense itself would be positive. With short interest above 30% of the float, in a scenario where the negative factors have peaked, shorts may be forced to cover, leading to a significant rebound.

Regardless of the direction, Musk will experience one of the most stressful weeks in his public life this week.

Remember the last time Musk publicly admitted he was "closest to a nervous breakdown" was in 2008. That year, SpaceX's Falcon 1 rocket had three consecutive launch failures, Tesla was burning through cash, the global economy was in a financial crisis, and he was going through a divorce.

Elon Musk later recalled that he had almost all of the approximately $180 million he received from selling PayPal invested in Tesla and SpaceX. By September 2008, just before the fourth launch, SpaceX was "almost out of money." Musk said that if this launch failed, the company would be done for.

But the rocket was successful. Several months later, NASA awarded SpaceX a contract worth about $1.6 billion, and Tesla's investors also injected funds before Christmas. Musk later called 2008 "the worst year of his life."

Now, Musk is facing yet another new crisis.

Interestingly, after shadowing Musk for two years, the author of "The Musk Biography" concluded that Musk not only can withstand high pressure, he has an almost instinctual craving for it.

In 2018, just as Tesla's Model 3 production hell had passed its most difficult phase, the stock price began to stabilize. Then, on August 7, Musk suddenly tweeted, "Considering taking Tesla private at $420. Funding secured." This tweet led to Tesla's stock being halted for trading, followed by a securities fraud charge from the SEC. Musk was ultimately forced to step down as Tesla's chairman for three years, with both him and the company paying a $20 million fine each.

People around Musk often refer to a term when talking about him: demon mode. His ex-wife frequently used this term to describe his state of extreme productivity and danger under high pressure.

And today, perhaps we can also look forward to what surprises Musk can bring us in the current high-pressure situation?

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