SpaceX Shares Surge on Earnings Beat, Bonds Weaken on Debt Concerns

SpaceX shares jumped as much as 12.44% after the company reported quarterly net income of $4.4 billion, far exceeding Wall Street's $18.8 billion... correction: $1.88 billion estimate, with revenue up 161% year-over-year. But the company's bonds weakened, with the credit spread on its 6.6% notes due 2046 widening 9 basis points to 264 basis points as of midday Wednesday in New York, according to Bloomberg. The divergence reflects investor concern that aggressive investment plans will require significant new borrowing. CFO Bret Johnsen said on the earnings call that SpaceX is "investing aggressively" in three areas with the highest expected long-term returns: superintelligence computing, Starlink broadband and mobile communications. He said the company intends to maintain an investment-grade credit rating. SpaceX raised $25 billion through bond sales in June. Bloomberg reported earlier this month that the company is in talks with banks and investors to raise $40 billion to purchase Nvidia (NVDA) chips. Johnsen confirmed the company is negotiating with multiple debt funding sources. The company's five-year credit default swap quote rose as much as 0.8 basis points to about 232.6 basis points on Wednesday, according to ICE Data Services.