AT&T Downgraded and Space Stocks Sell Off as SpaceX IPO Nears

3Ahead of SpaceX’s IPO, selling emerged across space-related stocks. As investors reduced their holdings to take profits, share prices of related stocks fell. In the market that day, news that the IPO was imminent was cited as one cause of the selling pressure.

At the same time, AT&T, a leading telecommunications stock, was downgraded in its credit or investment assessment due to the competitive impact of Starlink. The downgrade cited Starlink’s targeting of traditional wired broadband subscribers. AT&T was reportedly not responding with an official announcement.

Market participants said that portfolio rebalancing ahead of SpaceX’s IPO had increased short-term volatility. Some space-related small-cap stocks and ETFs underwent particularly sharp corrections. The selling was viewed as a combination of changes in supply and demand around the IPO and profit-taking.

Starlink is a service that provides internet through low Earth orbit satellites. It was noted that the service can target customers both outside urban areas and in regions where traditional wired services are strong. For that reason, the possibility was raised that the competitive landscape for existing wired telecommunications providers could change.

Market participants are watching SpaceX’s listing schedule and disclosures, as well as AT&T’s earnings and subscriber trends. Observers said that the expiration of the stock lock-up period and changes in supply and demand could continue after the listing. For now, price volatility in related stocks is expanding.