SEOUL, June 23 (AJP) — SpaceX has become an instant favorite among South Korean retail investors, who have poured nearly $2 billion into the stock since its June 12 Nasdaq debut, only to see the trade quickly turn painful as the initial heat surrounding Elon Musk's rocket rapidly cools.
According to data from the Korea Securities Depository on Tuesday, Korean investors purchased a net $1.95 billion worth of SpaceX Class A shares between June 12 and June 19. The buying spree far outpaced purchases of other popular U.S. investments, including the iShares Semiconductor ETF and the Roundhill DRAM ETF.
The frenzy quickly spread beyond the stock itself.
Retail investors also rushed into high-risk exchange-traded funds linked to SpaceX's price swings, betting on even larger gains despite mounting volatility. One of the most popular products was a leveraged ETF designed to deliver twice the stock's daily return. It ranked as the fourth-most purchased overseas security among Korean retail investors during the period, attracting net inflows of $62.8 million.
The rush was so intense that SpaceX instantly became the biggest overseas stock purchase by Korean retail investors this year, overtaking earlier favorite Micron Technology.
But the bet quickly soured.
After a blockbuster debut, the stock came under heavy selling pressure, tumbling 16.4 percent in the latest session after the company unveiled plans to issue more than $20 billion in bonds shortly after its equity offering. While Moody's Ratings, S&P Global Ratings and Fitch Ratings all assigned investment-grade ratings to SpaceX, the ratings remain well below the coveted triple-A level.
The move has fueled broader concerns about the company's balance sheet and its growing reliance on debt financing.
Shares surged 19.2 percent on their first trading day and briefly climbed as high as $225.64, instantly making SpaceX one of the market's most expensive stocks. The shares have since fallen to $154.60, down more than 31 percent from their peak.
Although the stock remains above its IPO price of $135, the sharp reversal has underscored the risks associated with highly volatile growth stocks.
iM Securities economist Park Sang-hyun said concerns are growing over AI-related borrowing as companies increasingly rely on debt to finance massive investments, warning that intensifying competition could eventually weigh on profitability across the sector.
"The market is becoming more sensitive to whether AI investment can generate sustainable returns, rather than simply rewarding companies for spending aggressively," Park said.
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