- SpaceX's stock rebounded 6.4% to $115.20 on Thursday after falling as much as 2.9% earlier, following a significant drop of 13.6% on Wednesday due to disappointing earnings.
- The first batch of shares (over 911 million, about 7% of shares outstanding) became eligible for trading on Thursday as lockup restrictions expired.
- SpaceX went public on the Nasdaq in June, with shares initially surging to $150 and then surpassing $225, but have since lost more than a quarter of their value.
- The drop in stock price was exacerbated by SpaceX's report of second-quarter earnings, where capital expenditures were more than twice as high as revenue.
- Additional unlocks are scheduled for Aug. 20 (319 million shares), September (roughly 700 million), and October (close to that number).
- Investors are concerned that the unlocking of shares may put pressure on the stock, which is already more than 50% off its high from mid-June.
- Musk, the world's richest person, is the biggest holder of SpaceX stock with more than 6 billion shares, which are locked up until June 2027.
SpaceX's stock has experienced significant volatility since its IPO, with shares initially soaring to $150 before peaking at $225. However, the stock has since dropped over 50%, closing at $108.27 on Wednesday.1
The recent unlocking of 911 million shares represents about 7% of the company's outstanding shares, raising concerns about potential selling pressure. Analysts suggest that while the increase in available shares is notable, it does not guarantee that all will be sold immediately.
Greg Martin, co-founder of Rainmaker Securities, noted that the stock's “near-term path” may be more influenced by the lockup expiration than by fundamentals.
Despite the challenges, some investors remain optimistic. Micah Walter-Range, a space industry specialist, stated that SpaceX has achieved “incredible efficiencies” in its operations and is applying this mindset to AI infrastructure.7
Phillip Lord, CEO of Bitcoin Japan, emphasized a long-term investment perspective, saying, “This is a 10-year trade for us”, highlighting the disruptive potential of Musk's ventures.8
As the market adjusts to the new supply of shares, analysts warn that volatility is likely to remain elevated, with early investors possibly looking to secure profits or explore other opportunities.
“The lockup expiry adds over 911 million shares, about 7% of shares outstanding, to the market, potentially pressuring a stock already more than 50% off its June high. Analysts at Mizuho note that eligibility doesn't guarantee full sale, while early investor Jessie Bates III plans to sell all his shares to 'lock in gains.'”
CNBC
