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SpaceX stock has been getting nailed by a series of headwinds since an initial post-IPO spike.
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Now investors have to contend with the company’s first share unlock, which could apply further pressure.
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SpaceX stock isn’t just falling. It’s hitting every branch on the way down.
After surging to a $2.6 trillion valuation on its third day of public trading, SpaceX stock has tumbled 46%, wiping out more than $1.2 trillion of that in the process.
The initial wave of selling came as investors balked at lofty valuations. Elon Musk certainly has his core base of die-hard followers, but it was still hard for the market to wrap its head around SpaceX as one of the 10 most valuable companies on earth.
More recently, on Wednesday after earnings, traders rebelled against heavier-than-expected AI spending, which overruled a revenue beat. The result was a 14% single-day drop, the company’s second-biggest to date.
Now SpaceX must tackle a final boss of sorts: the post-IPO lockup expiration for the first tranche of shares.
Today is the day, and the unlock — one of the biggest in capital markets history — will make as many as 911.5 million shares immediately available for trading. That’s $116 billion of stock, or roughly 8% of the company’s market cap as of Wednesday’s close.
Given how things have been going, it wouldn’t be surprising to see some early investors and insiders cut and run. Shares may be well below their IPO price, but these individuals are likely still up huge over the lifetime of their investment.
On the flip side, it’s possible some investors will want to wait and see if the stock recovers before ditching it. They’ve seen how high it can go. They might not be able to stomach selling at current prices.
And then there’s the matter of the role short sellers might play. Short interest in SpaceX has swelled in anticipation of a post-expiry mass-selling event. If selling is lighter than expected, that could trigger a relief rally that squeezes shorts and amplifies upward moves.
And the first unlock is just the beginning. Even after Thursday’s event, investors still have several more lockup milestones to contend with:
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Aug. 6: 20% of eligible shares can be sold starting on the second full trading day after Q2 earnings
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Aug. 20: Additional 7% can be sold on the 70th day post-IPO
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Sept. 9: Additional 7% can be sold on the 90th day post-IPO
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Sept. 24: Additional 7% can be sold on the 105th day post-IPO
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Oct. 9: Additional 7% can be sold on the 120th day post-IPO
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Oct. 24: Additional 7% of can be sold on the 135th day post-IPO
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Nov. 19: Up to an additional 28% of shares available for trading on the second full trading day after Q3 earnings
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Dec. 8: All remaining shares available for trading on 180th day post-IPO
