Success in space will be measured over years, not weeks
In the weeks following SpaceX's long-awaited market debut, Rocket Lab has found itself navigating the gravitational pull of a larger body — its shares falling 20% as investors reallocate capital toward the industry's dominant force. This is less a story of failure than of proportion: when a giant enters the room, even the accomplished must briefly step aside. The space sector, like the cosmos itself, is being reordered around a new center of mass, and the question for Rocket Lab is not whether it has value, but whether the market will remember that value once the novelty settles.
- Rocket Lab's stock has shed 20% in two weeks and nearly 50% from its May peak, a dramatic reversal after a 150% surge over the prior year.
- SpaceX's IPO acted as a gravitational event, pulling investor attention and capital away from smaller competitors in a classic portfolio reshuffle.
- Valuation math is driving the rotation — Rocket Lab at 50x sales versus SpaceX at 59x has made the larger player look comparatively reasonable to growth investors.
- Despite the market turbulence, Rocket Lab continues to win real business, including a new NASA contract for three scientific launches, signaling no fundamental breakdown.
- SpaceX itself has already fallen 25% from its post-listing high, a reminder that even the giant is not immune to the volatility that defines high-growth sector investing.
- New Zealand investors are holding firm — roughly 75% of local SpaceX trades are long positions, suggesting the frenzy has given way to a longer-term conviction.
Rocket Lab's shares have fallen sharply in the fortnight since SpaceX went public, dropping from just over US$100 to around US$80 — a 20% decline that caps a nearly 50% retreat from the company's May high of US$140. The timing is deliberate in its logic, if not in its pain: SpaceX's market debut redirected investor capital toward the space industry's heavyweight, leaving Rocket Lab temporarily in its shadow.
Investment specialist Greg Smith offered grounding context — over the past 12 months, Rocket Lab had surged roughly 150%, and early investors who held for two years saw returns of around 15 times their initial stake. The recent pullback follows an extraordinary rally, not a collapse in confidence.
What's unfolding is a textbook portfolio reshuffle. At its peak, Rocket Lab traded at over 100 times sales — a valuation that priced in perfection. It now sits at 50 times, while SpaceX trades at 59 times, making the rotation feel rational to growth-oriented investors. Rupert Carlyon of investment firm Kernel was clear: the decline reflects sentiment, not fundamentals. Rocket Lab has continued winning meaningful business, including a new NASA contract for three scientific launches.
New Zealand investors have been among the most active participants in the SpaceX IPO globally. Early trading showed a striking pattern — 99% long positions on day one, shifting to 74% short by day two, before stabilising at roughly 75% long. The volatility gave way to conviction. SpaceX itself has fallen about 25% from its post-listing high, a reminder that even the industry's dominant player is not exempt from the turbulence that accompanies high-growth investing.
For Rocket Lab, the task ahead is straightforward if not easy: let its launch capabilities, customer relationships, and technical record speak louder than the market's momentary distraction. In the space sector, as Smith observed, success is measured over years — not weeks.
Rocket Lab's stock has taken a sharp hit in the two weeks since SpaceX went public. The New Zealand-based launch company's shares fell from just over US$100 to around US$80—a 20% drop that marks a dramatic reversal from the company's extraordinary run earlier in the year, when it had climbed to US$140 in May.
The timing is not coincidental. SpaceX's market debut appears to have redirected investor attention and capital toward the space industry's heavyweight, leaving Rocket Lab in its shadow. Investment specialist Greg Smith noted that while Rocket Lab's shares were already softening before the SpaceX listing, the IPO accelerated the decline. From its May peak, the stock has now fallen nearly 50%. Yet Smith offered important context: over the past 12 months, Rocket Lab had surged roughly 150%, and early investors who held through the past two years saw returns of about 15 times their initial stake. The recent pullback, in other words, follows an extraordinary rally.
What's happening is a classic case of portfolio reshuffling. When a highly anticipated company enters the market, investors reassess their holdings and reallocate capital based on new information about relative valuations and growth prospects. SpaceX, as the industry's dominant player, naturally captured that attention. Rupert Carlyon, founder of investment firm Kernel, observed that Rocket Lab had traded at over 100 times sales at its peak—a valuation that priced in perfection. Now it sits at 50 times sales, while SpaceX trades at 59 times. That gap has prompted investors to rotate from Rocket Lab into the larger competitor.
Carlyon emphasized that the 43% decline over recent months stems more from sentiment than from any fundamental deterioration in Rocket Lab's business. The company has continued to secure meaningful contracts, including a new deal with NASA for three scientific launches. Carlyon also noted that Rocket Lab's issuance of 82 million shares over the past two years—representing 16% of total market cap—is not unusual for a high-growth startup and is not a primary driver of the stock's movement.
New Zealand investors have been particularly active in the SpaceX IPO. Data from BlackBull Markets showed Kiwi traders ranked among the most engaged globally in the stock's first week. Michael Walker, the firm's managing director, said the IPO was one of the year's biggest market moments locally. Interestingly, the trading patterns suggest investors are not chasing a quick flip. On the first day, 99% of trades were long positions. By day two, sentiment had shifted, with 74% of trades moving to short positions. Since then, the market has stabilized, with roughly 75% of trades remaining long—indicating that despite the volatility, most investors view SpaceX as a long-term holding.
Smith's broader point applies to both companies: success in the space sector will be measured over years, not weeks. SpaceX itself has fallen about 25% from its post-listing high, leaving many retail investors who bought during the initial frenzy underwater. That pattern is not unusual for newly public companies, especially in high-growth sectors where short-term volatility is the price of admission. For Rocket Lab, the challenge now is to demonstrate that its business fundamentals—its launch capabilities, its customer relationships, its technical innovation—remain intact even as investors temporarily redirect their focus elsewhere.
Notable Quotes
SpaceX has clearly captured the imagination of New Zealand investors. The IPO has been one of the biggest market moments of the year for us.— Michael Walker, managing director of BlackBull Markets
The share price has fallen 43% over the past few months, more for sentiment reasons than anything real.— Rupert Carlyon, founder of Kernel
The Hearth Conversation Another angle on the story
Why did SpaceX's IPO hit Rocket Lab so hard? Wasn't there room for both companies?
There was room, but investors had been treating Rocket Lab as the only way to get exposure to the commercial space sector. Once SpaceX went public, that changed overnight. It's like being the only restaurant in town—you're fine until a better restaurant opens across the street.
But Rocket Lab is still launching rockets, still winning contracts. Did something actually break in the business?
No. That's what makes this interesting. The fundamentals didn't change. Rocket Lab just signed a NASA deal. The problem is valuation. Rocket Lab was trading at 100 times sales—that's a price that assumes everything goes perfectly. SpaceX came in at 59 times sales, which felt more reasonable to investors. So people rotated.
Is this just panic selling, or is there something real about SpaceX being the better investment?
Both. SpaceX is objectively the larger, more dominant company. But the selling was also driven by sentiment and portfolio rebalancing. When you've had a 150% run in 12 months, a 20% pullback doesn't mean the company is broken—it means the market is repricing.
What about the New Zealand investors who jumped into SpaceX? Are they going to get hurt?
Some probably will, at least in the short term. SpaceX is already down 25% from its IPO high. But the data suggests most Kiwi traders are holding for the long haul, not trying to flip for quick profits. That's actually a good sign.
So what's the real story here—is Rocket Lab in trouble, or is this just noise?
It's noise superimposed on a real shift in the market structure. Rocket Lab isn't in trouble. But it's no longer the only game in town, and investors are pricing that in. The question is whether Rocket Lab can prove it has a sustainable business beyond being a proxy for space sector exposure.