Global stocks sell off as SpaceX IPO drains liquidity

09:59

By: Dakir Madiha

Global stocks sell off as SpaceX IPO drains liquidity

Global equities faced heavy selling pressure as investors reacted to expectations that a major SpaceX initial public offering would pull liquidity out of technology-heavy portfolios. BNP Paribas analysts linked the wave of declines in semiconductor stocks to retail investors liquidating positions to raise cash ahead of what is expected to be one of the largest public listings in history. Early signals emerged in the semiconductor sector, where Micron Technology dropped more than 13 percent in a single session, reinforcing concerns that retail-driven positioning was already unwinding.

The Philadelphia Semiconductor Index fell by 10.26 percent in its steepest daily drop in more than a year, marking a broad retreat across AI-linked chipmakers. Strategists pointed to concentrated retail exposure in semiconductor names and leveraged Nasdaq products as a key vulnerability. The pattern suggested that investors who had previously driven the artificial intelligence rally were now exiting positions simultaneously to participate in the upcoming listing.

SpaceX plans to raise at least 75 billion dollars through the sale of more than 555 million shares priced at 135 dollars each, targeting a valuation of around 1.75 trillion dollars at its Nasdaq debut on June 12 under the ticker SPCX. Up to 30 percent of the offering, worth about 22.5 billion dollars, is reserved for retail investors through platforms such as Robinhood, Fidelity, and Charles Schwab. The unusually large retail allocation has intensified concerns over funding pressure across existing equity portfolios.

Selling pressure extended beyond the United States into Asian markets, where technology stocks led a sharp regional decline. South Korea’s Kospi index fell more than 8 percent, triggering a trading halt mechanism, while Japan’s Nikkei 225 dropped 3.85 percent. Semiconductor and AI-related firms including Advantest, Tokyo Electron, and SoftBank Group were among the hardest hit as investors reduced exposure to high-growth technology names.

In parallel, institutional investors in the Gulf region viewed the IPO as a potential turning point for long-term holdings in SpaceX. Saudi Arabia’s Public Investment Fund previously discussed an anchor investment of around 5 billion dollars, while Kingdom Holding reported a 0.63 percent stake that could exceed 10 billion dollars in value at the proposed listing price. The listing is increasingly seen as a liquidity event that could crystallize gains for early strategic backers.