SpaceX bears are taking a victory lap as the stock struggles a month after the IPO

• After a brief post-IPO rally, shares of Elon Musk’s rocket and artificial intelligence company are in trouble.

• Bearish commentators say this decline reinforces their view that the stock has been overvalued all along.

• “I think it could be half that for the year,” said one bearish commentator.

SpaceX The stock has struggled after a brief burst of post-IPO enthusiasm, and bears are taking some time to reiterate their pessimistic views on the stock.

One month later a historic IPOSpaceX shares fell below their initial offering price of $135 on Wednesday, marking a 40% decline from their peak of around $225.

Wall Street analysts rushed to publish They had bullish price targets when the stock joined the Nasdaq 100 earlier this month, but bears are feeling emboldened by the decline, which they say reinforces the view that the stock was overvalued to begin with.

“We expect the price to fall completely,” former Fidelity Overseas Fund manager and hedge fund founder George Noble told Business Insider. “I think it might be half the year.”

Noble said $30 is a fair price target for SpaceX shares; This estimate indicates a 78% drop from Wednesday’s price. Room has been criticized before Tesla describes Musk’s EV company as the biggest bubble in stock market history.

Economist and market commentator Jay Ritter, who has been dubbed “Mr. IPO” for his expertise and research on companies and capital markets, told Business Insider: was thinking SpaceX shorted before its IPO. While Ritter wouldn’t say whether he was betting against the stock yet, he added that he wasn’t at all surprised by the post-IPO decline.

CFRA analyst Keith Snyder tagged the stock with a “sell” rating It directly followed its IPO and did not hesitate even as many of its peers on Wall Street put out bullish price targets and comments in their initial coverage.

“I’m still negative on the valuation at these levels and I haven’t seen anything that would change the story for me,” Snyder told Business Insider last week. The only thing he says would change his mind is real growth.

Day trader Ed Elson, who hosts Scott Galloway’s Prof G Markets podcast, said in June: saw the stock It is considered highly overvalued and is predicted to be cut in half within the next year.

On July 14, Elson shared his updated assessment of SpaceX, highlighting concerns about the bullish trend among Wall Street analysts.

Elson was put forward I wonder why this might be a problem for investors, especially since many bullish analysts are from banks underwriting SpaceX’s IPO. In his view, underwriters still have financial incentives to describe the stock favorably even after the legal ‘quiet period’ ends.

“Anyone who bought post-IPO is now underwater,” he said. “This fits the trend: Research shows “IPOs recommended by analysts for underwriting banks are underperforming and losing value on average.”

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