SpaceX's Nasdaq 100 debut turns sour, leaving Korean retail investors nursing steep losses

SpaceX, Elon Musk's space company, was added to the Nasdaq 100 index to great fanfare, but shares fell nearly 7 percent on the first day of inclusion, hitting their lowest level since the stock's listing.

The sharp drop has dealt a blow to Korean retail investors — known as "seohak gaemi," or "Western stock ants," for their appetite for US equities — who had poured about 3 trillion won into SpaceX, as well as to domestic space and aerospace exchange-traded funds that hold the stock.

According to Investing.com, SpaceX shares closed at $149.47 on Tuesday, down 6.83 percent from the previous session. It was the first time the stock had closed in the $140 range since its listing on June 12.

SpaceX debuted at $160.95 on June 12 — a 19.22 percent premium over its offering price of $135 — and at one point surged to $225.64, before settling into a trading range of roughly $150 to $160.

Heading into Tuesday's session, market sentiment had been broadly optimistic. SpaceX had been fast-tracked into the Nasdaq 100 under the exchange's rules after just 16 trading days since listing, and investors widely expected a wave of passive fund inflows to lift the share price.

The Nasdaq 100 is a price index comprising 100 of the world's leading blue-chip companies, including Nvidia, Apple, Microsoft and Amazon. Assets tracking the index worldwide exceed $800 billion.

The rally failed to materialize in the regular session, however. Analysts attributed the decline to a broader pullback in technology stocks amid concerns about peak valuations in AI semiconductors, profit-taking as the index-inclusion catalyst faded, and SpaceX's relatively small weighting within the index.

Korean retail investors who had poured large sums into SpaceX since its listing bore the brunt of the selloff. According to data from the Korea Securities Depository's SEIBro portal, they net-purchased $1.92 billion worth of SpaceX Class A shares between June 16 and Tuesday in Korean Standard Time — the period for which post-listing figures are available.

That figure dwarfed the second- and third-ranked net purchases: Micron Technology at $271.88 million and the Roundhill T-Rex 2x Long DRAM Daily Target ETF at $241.57 million.

Also cracking the top 10 was the Leverage Shares 2x Long SPCX Daily ETF, which tracks twice SpaceX's daily return, with net purchases of $125.28 million. SpaceX Class A has also become the top net-purchased stock by Korean retail investors for the year to date. With the share price now in sharp retreat, however, losses appear unavoidable for many of those investors.

Domestic space and aerospace ETFs with heavy SpaceX weightings have also seen their returns deteriorate sharply.

Over the past month, the TIGER US Space Tech ETF has lost 35.19 percent, while SOL US Space & Aerospace Top 10 has fallen 22.84 percent. ACE US Space Tech Active and KODEX US Space & Aerospace have also posted steep declines of 22.18 percent and 19.73 percent, respectively.

Wall Street analysts, however, remain bullish on SpaceX's long-term prospects. Morgan Stanley has set the highest target price on the Street at $300 — implying upside of more than 100 percent from Tuesday's close. UBS has a target of $210, and Goldman Sachs has set its price target at $205.