SpaceX lockup expiry could double publicly traded shares, pressuring stock
Up to 911.5 million SpaceX shares will become tradable on Thursday, more than doubling the float and potentially adding selling pressure as employees and early investors can sell.
More than 900 million SpaceX shares are set to unlock on Thursday, increasing the number of publicly tradable shares to roughly double the current float. The move follows the company's June 12 initial public offering, which initially placed less than 5% of its total shares on the market.
The newly available shares could prompt employees and early investors who purchased pre-IPO stock to sell, adding to recent volatility. The stock fell nearly 14% on Wednesday, closing at $108.27 per share, its second-worst day on record, after a earnings report showed higher-than-expected AI-related capital expenditures.
"You have a few different things triggering volatile action in the name, all happening at the same time," said Ryan Lee, senior vice president for product and strategy at Direxion.
Analysts note that the larger float will also raise SpaceX's weighting in indexes such as the Nasdaq 100, which the company joined earlier this summer. The index, which rebalances quarterly, could see SpaceX's weight rise from about 1% to over 3.5% after the September rebalance, depending on the stock's performance.
SpaceX's share structure includes 7.571 billion Class A shares, primarily held by employees and investors, and nearly 6 billion Class B shares, largely owned by Elon Musk and executives. The Thursday unlock is the first of a series that could bring more than 5 billion Class A shares to market by year-end. Musk's own holdings, representing over 40% of the company’s value, remain locked until a year after the IPO.
"An influx of new shares can weigh on any stock in the short term, but that doesn’t change the underlying picture," said Justus Parmar, founder and CEO of Fortuna Investments, in an email. "What matters most is the strength of the business and Musk’s ability to keep executing on the long-term vision."
Investors will watch whether unlocked shareholders choose to sell or hold, a decision that could influence SpaceX's share price in the near term.