Days after analysts at more than a dozen banks rolled out price targets that were almost uniformly bullish, the shares tumbled below their $135 IPO price for the first time, then kept falling toward $125. The reversal is jarring for a company whose Nasdaq debut in June was the largest in U.S. history: shares that peaked near $211 within three days of trading have now shed nearly 60% of their value, leaving even early allocation winners facing a loss if they sell today.

The big retreat blindsided the top Wall Street backers. Early-ish in July, analysts at eighteen of the banks that handled probably the most celebrated IPO of all time issued their outlooks for SpaceX. The…