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SpaceX stock gained nearly 3% in Thursday’s premarket session as investors prepared for its first post-IPO share unlock. SPCX traded near $112 after closing at $108.27 on Wednesday.
Up to 911.5 million insider-held shares can enter the market on August 6. However, eligibility does not mean employees and early investors will sell every unlocked share.
The initial release covers about 20% of restricted insider holdings. It also represents 143% of the current public float of approximately 639 million shares. SpaceX designed a staggered lockup schedule instead of releasing all restricted shares together. Another 319 million shares can be unlocked on August 12.
Further releases will follow 90, 105, 120 and 135 days after the amended IPO prospectus. More than four billion shares could become tradable by year-end. SpaceX completed its IPO on June 12 at a target price of $135 per share. Less than 5% of its total shares entered public trading at launch.
The limited supply initially supported strong demand from retail investors. However, SPCX has since fallen about 50% from its June 16 record high. Many employees acquired their holdings at prices far below current market levels. Some could sell shares to diversify their wealth or fund other investments.
Robert Hackel of RF Lafferty expects many early holders to monetize part of their positions. “You’re going to see a lot of exits,” he said.
Meanwhile, the lockup follows a sharp decline after SpaceX released its latest quarterly results. SPCX stock fell 13.61% during Wednesday’s session. Quarterly revenue increased 92% to $7.81 billion, exceeding Wall Street estimates. SpaceX also narrowed its net loss to $541 million during the period.
However, investors focused on the company’s rising capital expenditure. Spending reached about $18.4 billion, driven mainly by new artificial intelligence infrastructure. AI-related expenditure increased to $15.8 billion from $749 million one year earlier. Management expects elevated investment to continue during the coming quarters.
Starlink generated more than half of total company revenue. Sales from that division increased 66%, while SpaceX’s AI business reported faster growth. Heavy short positioning has added another source of volatility. A smaller-than-expected wave of insider sales could force some short sellers to close positions.
Moreover, Bernstein maintained its outperform rating on SpaceX and raised its price target from $239 to $248. The target suggests substantial upside from Wednesday’s closing price.
Bernstein linked the revision to SpaceX’s revenue growth and an improved compute pricing outlook. The firm also views Starship as a central valuation driver.
Other analysts have adopted more cautious forecasts. Piper Sandler lowered its SpaceX stock target from $156 to $140, citing risks surrounding the company’s expansion plans.
Morgan Stanley analyst Adam Jonas holds a $300 target. He views the share unlock as a possible buying opportunity despite the expected increase in available stock.
JPMorgan analyst Doug Anmuth said investors had prepared for the August 6 release. He noted that trading activity may already reflect part of the expected supply.
Cathie Wood’s ARK Invest also purchased more than $19.69 million of SpaceX shares across its exchange-traded funds. The firm added shares during recent weakness.
SpaceX’s public float could also affect its Nasdaq 100 weighting. TD Securities estimates the weighting could exceed 3.5% after September’s scheduled index review.
Also Read: SpaceX Stock Hits Record Low Despite Successful Starship Test Flight
