On August 6, approximately 911.5 million shares of SpaceX became eligible for trading following the expiration of a lockup period, valued at about $105 billion at the time. The stock rose 6.1% that day, closing at $114.92, and gained nearly 16% in the following session, reaching $135 for the first time in nearly a month. However, analysts caution that the full impact of the lockup expiration may not yet be felt, as many shares have not yet been delivered to investors.
Future Selling Pressure Expected
Research analyst Ed Elson noted that while the initial lockup expiration did not trigger the anticipated sell-off, there are still seven additional rounds of shares scheduled to become eligible for trading by the end of the year. He predicted "a lot of selling pressure" as early investors look to cash in their stakes. Another tranche of approximately 320 million shares is expected to become available on August 20, which could further test investor demand. Elson mentioned that short sellers closing their positions might have contributed to the stock's resilience against the increased supply.
Volatility Following IPO
SpaceX went public in June, raising about $85.7 billion in the largest IPO on record. The shares were initially priced at $135 and peaked at $225.64 shortly after the debut. As of August 10, the stock closed at $141.29, about 30% below its June high. Analysts suggest that the volatility could persist as additional lockup periods expire, potentially impacting the stock's price if demand does not keep pace with the increased supply.
Related coverage: Norway’s Wealth Fund Discloses $1.2 Billion SpaceX Stake.
The upcoming release of additional shares could create downward pressure on SpaceX's stock if demand weakens, particularly in the wake of the initial lockup expiration. Investors will watch closely as the next tranche of shares becomes eligible on August 20, which may influence trading patterns and stock performance.
Based on reporting by: forbes.com, businessinsider.com