On June 22, SpaceX announced a senior unsecured notes offering aimed at raising $25 billion, initially targeting $20 billion. The proceeds are intended to repay existing borrowings and cover general corporate expenses. Despite attracting nearly $90 billion in orders, the bond issuance has unsettled equity investors, leading to a more than 13% drop in SpaceX's stock following its IPO.
Analysts like Chris Beauchamp from IG noted that while the bond market can absorb the issuance, SpaceX faces challenges in distinguishing itself from more profitable companies.
Christopher Della Fave from Post Oak Group pointed out that SpaceX's significant losses and increased capital expenditures are not alarming in isolation, but they pose a structural risk for investors who hold both equity and bonds, as they represent the same execution risk. Julian Howard from Gam emphasized that the bond's tight spread to U.S.
Treasuries indicates potential risk if SpaceX fails to meet revenue targets. Furthermore, Morningstar's Mike Coop highlighted that the influx of shares from early investors and the company's heavy losses could lead to a decline in stock prices, complicating the investment landscape for both equity and bond holders