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Angel blake
[Pharaoh's Market Watch]
Everyone is asking Pharaoh, SpaceX just secured a $1.6B contract with the US military, so why is the stock still falling? What exactly is the market afraid of?
Pharaoh says directly, the $1.6B contract looks impressive, but compared to SpaceX's trillion-dollar valuation, it's just a drop in the bucket; the market simply isn't buying it. The US military is indeed supportive, with the Space Force placing 18 Falcon 9 launch orders, plus a $6.5B contract in May, totaling at least $7B in Pentagon contracts this year. But the stock price keeps falling; on July 29 it closed at $112.55, even lower than the $135 IPO price.
Why isn't it rising? Threefold pressure:
First, the valuation bubble is too large. On the first day of listing, it surged to $225, with a peak market cap of 2.66 trillion. In less than a month, it dropped back to $113, evaporating over 1.2 trillion. The market has cooled down and realized the company is still losing 4.9 billion in 2025 full year, and the AI business alone lost 6.3 billion in one quarter. Just painting rosy pictures can't support a trillion-dollar valuation.
Second, the August lock-up expiration is approaching. Over 900 million restricted shares will soon flood the market, with short positions accounting for 30%, and unrealized profits near 8 billion. The market fears major shareholders cashing out early, racing to sell faster than anyone else.
Third, Musk's two trump cards are both taking hits. Tesla has dropped 31% year-to-date, free cash flow turned negative for the first time in two years, and automotive gross margin collapsed to 16.3%. SpaceX plus Tesla have evaporated a combined 1.5 trillion in market value this month; Musk's wealth is shrinking faster than rockets.
Pharaoh's view?
The $1.6B order is positive, but it doesn't solve the fundamental problems. What really determines SpaceX's stock price trend is whether the August 4 earnings report can show the market hope for turning a profit, and whether insiders will sell on the August 6 lock-up expiration day. #Fed3Dissents
