The First Test for SpaceX Stock Was in the Debt Market, Not on the Launchpad. It May Have Scored Better Than You Think.

SpaceX’s (SPCX) first major test as a public company did not come from a rocket launch, a Starlink update, or a new artificial intelligence deal. Instead, it came from the debt market. Shares of SpaceX tumbled after the company announced its inaugural offering of senior unsecured notes, triggering SPCX stock’s sharpest one-day decline since its trading debut earlier this month. For a company that became one of the world’s most valuable public companies after its record IPO, the reaction was a reminder that even the most exciting names can face pressure when investors start focusing on financing needs, cash burn, and long-term execution risk.

So, what should shareholders make of SpaceX’s first bond offering? Was the selloff an overreaction to a routine refinancing transaction, or does it signal deeper concerns about the company’s funding needs? More importantly, what should investors watch next? Let’s take a closer look.

About SpaceX Stock

SpaceX designs, manufactures, and launches advanced rockets and spacecraft while also operating Starlink, its global satellite-internet network. Following its acquisition of xAI, SpaceX has expanded beyond launch services and broadband connectivity into AI, combining space infrastructure, satellite communications, and AI development under one platform. The company’s core businesses include reusable Falcon rockets, Dragon spacecraft, the Starship program, Starlink, and xAI’s products, including Grok. This broader structure positions SpaceX as a vertically integrated technology company focused on space transportation, global connectivity, and AI-powered infrastructure. SPCX has a market cap of $2.04 trillion, ranking it as the world’s seventh-most valuable public company.

SpaceX's shares have been volatile since their trading debut on June 12. The stock tumbled more than 16% on Monday after the company announced its inaugural bond issuance. However, SPCX stock posted more subdued moves on Tuesday and Wednesday, suggesting that a period of relative calm may be emerging.

SpaceX’s First Bond Offering Triggers Its Worst Post-IPO Selloff

SpaceX shares cratered on Monday, posting their largest one-day decline since going public earlier this month, after the company announced its first-ever bond offering. The stock slumped more than 16%, wiping out $400.8 billion in value and marking the second-largest one-day loss in market cap ever recorded for a U.S. company. The company’s bond offering heightened broader investor concerns about the scale of fundraising by AI hyperscalers.

Bloomberg reported that the rocket and AI company raised $25 billion through a five-part bond offering on Tuesday. 

However, Musk’s star power did not appear to carry the same weight in the debt market, as the company had to offer a relatively wide spread over Treasuries to complete the deal. Its 10-year notes reportedly priced at a spread of 1.4 percentage points above Treasuries. That is roughly 0.4 percentage points wider than the average spread for similarly rated BBB-tier debt, according to a Bloomberg index. Moreover, demand was strongest for the shortest-dated tranche of the offering. These factors essentially point to investor concerns about SpaceX’s cash flow. The company is burning cash at a rapid pace, and S&P Global Ratings expects that trend to persist through 2030.

The offering came after SpaceX received investment-grade ratings from major credit agencies, paving the way for lower borrowing costs (I will return to this a bit later). Last week, Moody’s Ratings and Fitch Ratings assigned the company’s debt ratings of Baa1 and BBB+, respectively, placing it three notches above junk status. S&P Global Ratings assigned a BBB rating, which is one notch lower.

SpaceX plans to use the net proceeds from the offering to repay a temporary $20 billion bridge loan that matures in September 2027. The bridge loan accounts for the majority of SpaceX’s $29.1 billion of long-term debt as of March 31, according to the company’s IPO filing with the Securities and Exchange Commission. That loan was used to pay off debt associated with xAI, which SpaceX acquired earlier this year. Much of the company’s remaining long-term debt is linked to obligations associated with “certain AI infrastructure assets recorded as failed sale-leaseback transactions.”

Meanwhile, SpaceX said any additional proceeds raised would be used for “general corporate purposes.” That means the company got $5 billion to support its business plans. It had $100.8 billion in cash and cash equivalents on its balance sheet as of June 19. Most of that stems from the more than $85 billion the company raised through its initial public offering.

SpaceX’s bond offering is the latest in a series of financing deals by companies at the forefront of the AI boom. Alphabet (GOOG) (GOOGL), Amazon (AMZN), and other companies have raised more than $300 billion in AI-related debt across multiple credit markets since November of last year.

SpaceX’s Debt Deal Looks More Strategic Than Investors Think

A closer look at the broader context of SpaceX’s offering suggests it may not be as bad as initially feared. I’m not a fan of companies issuing new debt to repay existing obligations, but in SpaceX’s case, I believe the move can be justified, particularly given that the company had sufficient cash on hand to retire the bridge loan. SpaceX tapped the bond market to secure funding at relatively low borrowing costs after obtaining investment-grade ratings, and because the offering included maturities ranging from five to 30 years, it effectively extended the repayment timeline of the bridge loan it refinanced, allowing the company to preserve cash for its ambitious projects.

SpaceX is expanding its global satellite network, scaling its AI business, and even pursuing plans to deploy data centers in space, all while developing Starship, the massive rocket that serves as the foundation for many of the company’s long-term ambitions. And let’s not forget Terafab, its joint venture with Tesla aimed at producing advanced chips for robotics, AI, and space-based data centers. As I noted in my latest article on SPCX, much of SpaceX’s current valuation depends on its ability to turn Musk’s ambitious vision of orbital AI data centers into a multi-billion-dollar business over the coming years. And achieving that goal will also require the company’s massive, fully reusable Starship rocket, which is expected to significantly reduce the cost of reaching orbit. With that, investors should closely monitor progress on these projects, as they will play a critical role in the company’s long-term growth trajectory.

Another important point is that these projects are extremely pricey, and SpaceX will likely return to the bond market multiple times in the years ahead to fund them. Notably, the company stated in its IPO filing that capital expenditures will rise “substantially” in the future and that it intends to use “a range of debt and equity financing solutions” to finance future investments. Oppenheimer analysts, led by Timothy Horan, expect debt to be SpaceX’s primary source of funding, projecting that the company will add more than $400 billion in net debt by 2031.

For now, investors should keep a close eye on the company’s AI business, which is expected to be a key growth driver in the coming years. SpaceX recently announced two new agreements to lease data center capacity to Google and Anthropic for about $26 billion annually. Earlier this week, SpaceX signed an agreement to provide computing capacity to AI startup Reflection AI. The deal will generate $1.8 billion in annual revenue for SpaceX. In addition, SpaceX said last week that it would acquire Cursor parent Anysphere in a $60 billion all-stock deal as part of an effort to narrow the gap with its AI rivals.