Shares of SpaceX Corp (NASDAQ:SPCX) are expected to open lower on Tuesday. About 319 million shares will become eligible for sale. This follows the company's record flotation in June and will take effect on August 20. The stock was down 2.5% ahead of the opening bell in New York, reversing a nearly 6% increase seen on Monday.
Recent Stock Performance
The recent rally in SpaceX shares was driven by regulatory filings. These filings showed that more than 1,500 institutions had built positions in the company. Despite this, ownership remains concentrated. Just 23 investors control over 80% of the reported shares. Alphabet, the parent company of Google, holds the largest stake at 551.2 million shares. Fidelity follows with 302.6 million shares. SpaceX shares had previously dipped to an all-time low of $104.83 on August 3 but have since recovered to around $146. This is above its initial public offering price of $135.
Analyst Concerns
Scott Galloway, a marketing professor and investor, has criticized SpaceX's valuation. He suggests that the stock is overvalued. On a podcast, he stated that he believes SpaceX shares should be worth between $10 and $30. This is significantly lower than the current trading price. Galloway pointed out that the stock's valuation is partly driven by limited supply. Only about 4% to 5% of shares were initially available for public trading. He also noted that the company’s recent $25 billion bond offering shows a reliance on borrowing for future expansion.
Related coverage: Nvidia Discloses $21 Billion Stake in SpaceX Amid Growth.
The upcoming release of 319 million shares could put downward pressure on SpaceX's stock price. Early investors may seek to take profits. This situation may influence investor sentiment and trading activity in the technology and aerospace sectors.
Watch for further developments regarding the stock's performance after the share release and any potential responses from major shareholders.
Based on reporting by: businessinsider.com, proactiveinvestors.co.uk