SpaceX just spent the afternoon trading below its own IPO price. So much for $135 being a floor. If you're just joining, SpaceX's debut started as a price-action story and turned into a fundamentals test. Investors are weighing the IPO valuation against Starlink economics, launch cadence, and reusable-booster execution, while a small public float made the early trading wildly volatile. The question all week: can SpaceX's price keep propping up the whole AI-and-frontier-tech IPO window? This is AI IPO Watch. Today — the greenshoe question stops being hypothetical, DeepSeek chases $71 billion, and Wall Street quietly pockets the fees no matter where any of this closes. We start with SpaceX under $135. TechCrunch, with Sean O'Kane:
The company’s stock spent much of the day below that IPO price, at one point dipping beneath $133 per share, before it traded back up to finish at $135.27. The dip on Wednesday followed a steady decline in the month since the company went public. SpaceX initially saw its stock price rise to more than $200 in the days after it went public, briefly giving it a valuation that rivaled tech giants like Amazon and Microsoft.
Here's the latest on SpaceX's repricing, and the close gives us a clean marker. The stock spent Wednesday below $135, dipped under $133 at one point, per TechCrunch, before scraping back to close at $135.27. For three days I've been saying the thin float would cut both ways. Well, now it's on the tape. The stock's trading under the $135 offer price, and that's the level it has to fight back through. And that's the part that makes the greenshoe question real instead of academic — which we'll get into. If stabilization is still open and the stock is underwater anyway, the tape is telling you where demand actually clears. Remember it touched $200 in June — Amazon-and-Microsoft territory on 4% of the shares. Retail bought the rocket-plus-chatbot narrative at $200. That buyer isn't just down from their entry now. They're underwater relative to the price Musk himself picked. The one thing I'll grant the bulls — Starship attention is building right into this. But a launch narrative doesn't solve a float problem. Four percent trading and infinite eyeballs is a recipe for exactly these swings, in both directions. When a stock like SpaceX slides below its IPO price, I keep hearing the word 'greenshoe' thrown around as some kind of safety net — but what actually is that, and can underwriters really just prop up a stock whenever they want? Great question, because the greenshoe may be the most misunderstood tool in the IPO playbook. Plain English: underwriters can sell up to 15% more shares than the company actually issues. They borrow those extra shares, so they're short from day one. If the stock falls after listing, they can buy shares in the open market to cover, and that buying can help stabilize the price. Reuters' reporting in the Economic Times explainer published June 13th said SpaceX's record $75 billion IPO was priced at $135 a share — Morgan Stanley confirmed that on LinkedIn on debut day — and included a greenshoe meant to 'ensure orderly trading in the weeks after listing.' The SpaceX twist: Outlook Business, citing reporting from around that same period, said SpaceX negotiated a zero-dollar fee for banks on the greenshoe exercise. That's unusual, and it meant the underwriting banks gave up an estimated $75 million in fees. But stabilization doesn't last forever. The window is usually 30 days after listing. And Reuters, in Laura Matthews' July 15th analysis, reported that SpaceX had slipped below its $135 IPO price in late June — by then, that stabilization window would have been narrowing — as broader tech valuation concerns weighed on global indexes. So if the greenshoe window is already closing or closed, and the stock is still sliding, when does that stop looking like normal post-IPO turbulence and start looking like a real red flag? That's exactly what analysts — and the next IPO candidates — are trying to sort out. Reuters' reporting, picked up by The Hindu BusinessLine on July 16th, says analysts are calling the decline 'normal post-IPO price discovery.' But the same piece says OpenAI and Anthropic are watching SpaceX's performance closely as they weigh their own listings. The warning sign is a sustained break below the offering price that starts shaking retail confidence, because as Reuters' Laura Matthews put it, a marquee debut can turn into a 'confidence test' for the entire IPO market. Matt Phillips, writing in Axios:
"The pipeline is actually quite robust," JPMorgan chief financial officer Jeremy Barnum said on the bank's post-earnings conference call, adding that "it feels a little bit as if the high-profile nature of the activity this quarter and just the generally robust environment is itself begetting more activity."
So here's the receipt nobody wants to frame and hang on the wall. Goldman and JPMorgan just printed record highs on underwriting revenue — the fees from bringing SpaceX, Alphabet, and Nvidia to market. And we just spent the last segment watching SpaceX trade below its $135 IPO price. Same banks. One of those outcomes made money regardless of where the stock closed. On the fee side, this is the clearest data point we've gotten. The people who set SpaceX at $135 are booking underwriting fees on the AI debt wave while the equity they priced sits at that level — or below it. And remember that $800 target from Raymond James — a non-bookrunner. The banks actually collecting the fees aren't the ones publishing detached price targets. Follow the fee schedule, not the research note. Barnum's line on the call is the tell — he says the high-profile activity is 'itself begetting more activity.' Translation: the deals beget fees, the fees beget more deals, and where the stock lands afterward isn't on that flywheel. This one's from The Next Web:
DeepSeek is getting ready to go public. The Chinese AI lab has started laying the groundwork for an initial public offering, according to Bloomberg. It could file as soon as this year, with a debut targeted for 2027. First, though, it wants to raise more in private.
So here's the off-ramp from the SpaceX autopsy — DeepSeek. Chinese AI lab, chasing $71 billion, per Bloomberg, and it closed its first-ever outside round near $50 billion just weeks ago. The $71 billion is not in any filing. It's a pre-money number floated to new backers on a round that hasn't closed. That's a negotiating position wearing a valuation's clothes. And look at the slope on this thing — $10 billion in April, past $20 billion when Tencent and Alibaba showed up, nearing $45 billion by May, closed near $50 billion in June. That's roughly sevenfold in three months. A forty percent markup in six weeks on a number that came from anonymous sources. And that's the number retail may eventually be asked to price — an open-source AI lab with no disclosed revenue line I can point to. Which is the SpaceX problem stripped of its ballast. There, retail bought a chatbot story bolted onto a launch business — actual rockets underneath. Here, there's no rocket under it. Just the narrative, standing alone, at $71 billion. And the label's carrying the valuation here. CFRA's Snyder called SpaceX 'marketed as an AI play.' DeepSeek doesn't need the qualifier — it is the AI play, priced entirely on what people believe it becomes. One thing the S-1 nobody's read yet won't cover cleanly — this is a Hangzhou lab. Founder control here isn't just a governance preference; it's inside a whole different regulatory universe. That's a risk dimension the SpaceX filing never had to touch. IPO maybe this year, debut targeted for 2027 — off a first outside round that closed in June. That's about the fastest private-to-public sprint I've seen in this cycle, and the price is still being invented in real time. If AI IPO Watch helps you stay ahead of the market, please subscribe and leave a quick review wherever you're listening. It really helps other people find the show and join the conversation.
What we're watching next: DeepSeek is reportedly working with accounting and banking advisers to finish its financial statements by the end of December.
You'll find links to every story we covered in the show notes, so if you want a closer read, that's the place to start. That's AI IPO Watch for today. This is a Lantern Podcast.