SpaceX's $25bn bond offering attracted $89bn in orders despite the company's shares falling roughly 30% from their post-IPO peak. The massive demand follows the rocket company's $86bn initial public offering, creating an unusual dynamic where equity investors still hold paper profits while bond buyers pile in at attractive yields.

Allianz CIO Ludovic Subran suggested the bond sale signaled 'bubble territory,' though investors clearly disagreed. Bond investors typically avoid the volatility that equity holders embrace, focusing instead on coupon payments and credit risk. Unlike stock valuations that require optimism, bond spreads reveal market perceptions of creditworthiness in basis points.

SpaceX's bond spreads sit wide for their triple-B rating category, comparable to General Motors' post-bankruptcy credit profile but less risky than Oracle. This suggests investors either doubt the company's ability to maintain investment-grade status or demand substantial compensation for perceived risks.

Despite the generous risk premium, SpaceX bonds have underperformed recently as spreads widened and total returns declined. While equity investors remain in the money after the IPO pop, bond holders counting cold hard basis points are posting losses in early trading.