Gina Rinehart is among thousands of Australians who have lost money on Elon Musk's SpaceX, as the tech company's share price crashed back to earth. SpaceX shares closed below their debut price of US$135 a share during trading on Thursday, at US$131.11.
SpaceX stock performance since IPO
The tech company, which also owns xAI and social media platform X, had soared to a market value over US$2.6tn in the first three days after its share market listing in mid-June, but has steadily fallen back to a record low market value of US$1.72tn. Rinehart's company, Hancock Prospecting, took a stake in SpaceX at its initial public offering (IPO), the biggest debut in stock market history, which briefly made Musk the world's first trillionaire. Musk's fortune has fallen to US$838bn as of Thursday, according to Forbes.
Rinehart's investment and paper losses
Some Australian institutional investors have said they sold out of SpaceX early to bank their profits but Rinehart has not suggested she has abandoned her position. Hancock Prospecting declined to comment when asked about the value of its initial stock purchase, and whether it had bought or sold more shares in SpaceX since the listing. But the company has republished a number of articles on its website reporting it bought over US$1bn worth, suggesting Rinehart may have lost a US$500m (A$714m) paper gain from the stock's peak. Thursday's close, nearly 3% below the debut price, implies Rinehart lost a further US$30m (A$43m) on paper.
Analyst perspective on long-term investment
Tony Sycamore, market analyst at IG Australia, said Rinehart would not be worried by her lost profits. “You're looking to invest in SpaceX for the long term, you're backing the man,” Sycamore said. “She knows Elon personally.” The billionaire has met Musk and said he “excels in every regard” in her June statement announcing the investment by her company, Hancock Prospecting. “Hancock favours investing in industries led by sensible, hard working, patriotic and exceptional people,” Rinehart said in June.
Retail investor interest in SpaceX IPO
Days later, Rinehart used a speech to suggest Australia offer Musk free use of north Queensland islands to build and launch satellites, and paid homage to his chainsaw-wielding stunt by giving Pauline Hanson an orange toy bulldozer. Australia's lead retail share broker, CommSec, said 28,000 people applied to buy SpaceX shares, though it declined to disclose how many made successful purchases. The tech business reportedly received applications globally from three times more investors than it could sell to, suggesting only some of those 28,000 Australia retail investor applicants bought in. CommSec said that was a record total applications, with the largest Australian IPO receiving just a quarter as many.
Long-term outlook for SpaceX investors
Sycamore said some local investors likely bought in to sell at the early highs but many would still expect returns in the long term. “These types of investors, the mums and dads who supported it so willingly and so enthusiastically … obviously they would prefer to see it still trading at a profit,” he said. “[But] it is the new frontier of tech stocks. It is something that is not going to pay off in a month or a year. You're looking to be involved in this stock for a decade.” SpaceX's share price has fallen in seven of the last eight trading sessions, which Sycamore attributed to easing euphoria. The company recorded its biggest one-day fall on 22 June, when it announced it would take on billions more in debt by issuing bonds. Bloomberg has reported short sellers betting against SpaceX have recorded profits of US$3.88bn (A$5.55bn).
