SpaceX completed a $25 billion bond deal this week, drawing $90 billion in orders — a sign of intense investor demand for exposure to Elon Musk's rocket and AI company. The deal came less than two weeks after the company raised tens of billions in cash, according to MarketWatch.
Yet the bonds have already sold off in secondary trading, with yields moving toward levels commonly associated with junk-rated borrowers, the Financial Times reported. The rapid deterioration suggests some investors are having second thoughts about the risk-reward balance of the offering.
The $90 billion in orders represented a staggering 3.6 times oversubscription, but the subsequent price weakness reveals a disconnect between initial demand and aftermarket stability. MarketWatch characterized the sell-off as "a warning sign" and noted investors may be "pumping the brakes on AI frenzy."
The sell-off could signal broader unease about richly valued companies in the AI and space sectors. SpaceX's ability to raise such a large sum remains a vote of confidence from institutional buyers, but the price action suggests caution is creeping in.
Some analysts point out the bond's size may have overwhelmed the market, making technical factors the primary driver of the sell-off rather than a fundamental shift in sentiment toward SpaceX.