SpaceX shares rose more than 6% on Thursday after up to 911.5 million previously locked-up shares became eligible for trading, more than doubling the number of shares available to the public since the company’s June initial public offering.
The share unlock came a day after SpaceX suffered its second-worst trading session, with the stock plunging nearly 14 per cent to close at $108.27, its lowest level since listing.
The latest rebound suggests some investors may be using the sharp decline to buy the dip, even as the influx of newly tradable shares creates the potential for increased selling pressure and volatility.
A lockup expiration allows employees and early investors who acquired shares before the IPO to sell them. However, shareholders are not required to sell and can choose to retain all or part of their holdings.
SpaceX sold about 640 million shares during its IPO, representing less than 5 per cent of the company’s total shares.
Thursday’s release of up to 911.5 million additional shares more than doubled the number available for public trading, taking the proportion of publicly available shares to about 12 per cent.
The company has adopted a staggered schedule for releasing additional shares rather than making all previously restricted shares available at once.
Analysts expect further unlocks over the coming year, potentially bringing more than 5 billion Class A shares into the public market.
The increased share availability could also have implications for SpaceX’s weighting in major stock indexes.
SpaceX currently accounts for about 1% of the Nasdaq 100. TD Securities estimates its weighting could rise above 3.5 per cent after the index’s September rebalancing, depending on the company’s share price and the number of shares deemed publicly available.
Despite Thursday’s gains, SpaceX shares remain under significant pressure following their strong debut in June.
The stock has fallen more than 40 per cent from its record high of June 16 and is about 15 per cent below its $135 IPO price target.
The company’s latest earnings report also raised concerns among investors after it disclosed higher-than-expected capital expenditure on artificial intelligence projects.
The combination of heavy AI spending, the share unlock and the stock’s recent decline has contributed to increased volatility.
Ryan Lee, senior vice president for product and strategy at Direxion, said several factors were influencing the stock at the same time, making the recent price swings difficult to attribute to a single event.
Retail investors have continued to show strong interest in SpaceX despite the decline in its share price.
According to Viraj Patel, global macro strategist at Vanda, Wednesday and Thursday recorded the strongest retail investor activity in SpaceX since the first three days following its IPO.
Patel said retail investors had recorded net buying on every trading day since the company went public.
The continued buying suggests that individual investors remain optimistic about SpaceX’s long-term prospects, even as institutional and early investors gain greater opportunities to sell.
The newly unlocked shares could create additional selling pressure, particularly among employees and early investors who acquired their holdings at prices significantly below the IPO level.
Investors who bought shares before the company went public may still be sitting on substantial gains despite the recent decline, potentially giving them an incentive to sell.
However, not all newly eligible shareholders are expected to sell.
University of Florida professor emeritus and IPO expert Jay Ritter said a stock can sometimes rise following a lockup expiration if selling pressure turns out to be weaker than expected.
SpaceX has more than 7.5 billion Class A shares, largely held by employees and investors, and more than 5.5 billion Class B shares, mostly controlled by Elon Musk and company executives.
Musk’s shares, which represent more than 40 per cent of the company’s value, remain locked up until one year after the IPO, with executive lockup expirations extending into 2027.
For investors, the immediate question is whether the newly available shares will trigger a wave of selling or whether continued demand for SpaceX will absorb the additional supply.
For now, Thursday’s 6 per cent rebound suggests investors remain willing to buy the stock despite the increased supply and recent concerns over valuation and AI spending.
