SpaceX’s Starship Scrub Isn’t Just A Tech Glitch – It’s Bleeding Its Post-IPO Valuation Dry

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By: Oliver Hawthorne

The core contradiction here couldn’t be starker. SpaceX pulled the largest IPO in history on June 12, raising $85.7 billion and briefly hitting valuations on par with Amazon and Microsoft. Public investors bought into its promise of revolutionizing space access and building a multi-billion dollar off-world data business. Now every minor launch mishap is dragging its stock below IPO price, and the market is openly questioning whether its core commercial milestones are even achievable on the promised timeline. The anxiety isn’t limited to aerospace nerds tracking Raptor engine reliability. It’s spread to every institutional investor that bought into SpaceX’s IPO hype, now staring down mounting losses as its five-day losing streak stretches on.

The abort happened Thursday right at ignition. The launch pad’s water deluge system had already activated, and the Super Heavy booster engines were starting to light when the system cut out entirely. SpaceX’s own broadcast data showed four Raptor engines failed to ignite, triggering the automatic abort sequence.

The FAA had only cleared SpaceX to fly earlier that Monday, following a mandatory review of its May V3 launch failure. That mission saw the Super Heavy booster suffer an engine failure during descent, crashing into the Gulf of Mexico instead of completing its simulated landing. The FAA’s final mishap report cited two root causes: heat damage to propulsion components during ascent, and incorrect engine alarm system settings. SpaceX rolled out four corrective actions, including hardware and software updates, to get reapproved for flight. The scrubbed mission was set to carry 20 next-generation Starlink satellites, designed to burn up 20 minutes after deployment as part of the first test of SpaceX’s orbital data center concept. SpaceX has not yet proven Starship can reach stable Earth orbit, so the disposable satellite design was a low-risk way to validate key parts of the orbital data center pipeline.
SPCX Stock Card
SPCX closed regular trading Thursday at $131.11, already below its $135 IPO price. It fell another 4.65% in pre-market trading Friday, hitting $125. Teams are currently offloading all propellant from both the Super Heavy booster and the Starship upper stage before running full diagnostics on the ignition sequence failure. Musk confirmed two faulty Raptor engines will be removed and replaced, with the next launch attempt expected early next week.

Starlink is currently the only profitable segment of SpaceX’s business, and its largest revenue generator by a wide margin. Every delay to Starship’s operational rollout pushes back the timeline for scaling Starlink’s next-generation constellation, and delays the launch of the orbital data center services that are supposed to drive SpaceX’s next decade of growth. Public shareholders don’t care about Mars colonization timelines right now. They care about hitting the revenue targets that justified SpaceX’s record-breaking IPO valuation. The company’s current market capitalization relies entirely on the assumption that Starship will be running regular, low-cost commercial launches by 2027. If the next launch attempt scrubs or fails, expect SPCX stock to drop another 12-18% before the end of July, as institutional investors begin offloading lock-up shares the second they become eligible to trade.

Author bio: Oliver Hawthorne, Principal Correspondent for a leading international technology review, covering aerospace commercialization for over a decade.