Is the 50% SpaceX stock crash a once-in-a-lifetime buying opportunity?

It’s been a wild ride for investors who bought Space Exploration Technologies Corporation, aka SpaceX (NASDAQ: SPCX), stock during its June IPO.

The hype surrounding the world’s biggest-ever flotation hasn’t done the shares any favours. They opened at $135, quickly rocketed to an intra-day high of $225, then crashed back to around $108. Peak to trough, that’s a 52% slump.

There are two ways of looking at this. Both fascinate me. The first? I’m delighted I didn’t buy SpaceX at the IPO. And the second? This might just be my chance.

Here are five reasons why buying SpaceX shares today could be a brilliant move, along with five reasons why it might be a bad idea.

1. The hype premium has gone

Quite simply, the post-IPO collapse could be a chance to buy one of the world’s most exciting companies at half its peak price.

But… the SpaceX share price could still have further to fall. Oil and inflation may climb, interest rates may follow and AI could be a bubble. Also, SpaceX insider lock-up periods expire during August and September, potentially unleashing another wave of selling.

2. Starlink is flying

SpaceX’s satellite internet business generates more than $11bn a year from over 10m subscribers. It’s an extraordinary business with a formidable competitive moat.

But… SpaceX is also pouring billions into its cash-hungry xAI operation. Last year, the group reportedly lost $5bn, and that’s the main reason why.

3. It’s the king of rocket launches

SpaceX pioneered reusable rockets and nobody can match its launch capability. Whether you’re a government or commercial satellite operator, there aren’t many realistic alternatives.

But… this is still an inherently risky business. One high-profile launch failure could burn up tens of millions of dollars and dent confidence overnight.

4. Index funds have to buy it.

Following its rapid inclusion in the Nasdaq 100, tracker funds and ETFs now have to own the shares, creating a huge built-in pool of buyers.

But… the S&P 500 demands a longer public track record and consistent profitability, and it’s nowhere near delivering that.

5. Elon Musk

Elon Musk has repeatedly built world-leading businesses by attempting what everybody else thought was impossible.

But… investing in Musk always requires a leap of faith. Do you really want to bet part of your pension on his dream of putting humans on Mars?

As you can see, there isn’t an easy answer. Especially today, when rising oil prices threaten inflation and nobody yet knows whether the AI boom will transform the global economy or prove the investment bubble of the century.

Many investors already have huge exposure to US technology after years of spectacular gains. Do they really need more? My personal answer is complicated by the fact that I already own SpaceX indirectly through the Scottish Mortgage Investment Trust, which invested in Musk’s space giant while it was still privately owned in 2018.

SpaceX is the definition of a high-risk, high-reward stock. Brave investors might consider buying it at today’s reduced price, but I’ll stick with what I’ve got. This is going to be a bumpy ride.

Should you invest £5,000 in SpaceX right now?

When investing expert Mark Rogers and his team have a stock tip, it can pay to listen. After all, the flagship Twelfth Magpie Share Advisor newsletter he has run for nearly a decade has provided thousands of paying members with top stock recommendations from the UK and US markets.

And right now, Mark thinks there are 6 standout stocks that investors should consider buying. Want to see if SpaceX made the list?

Harvey Jones owns shares in Scottish Mortage.