SpaceX shares have slipped below their US$135 initial public offering (IPO) price for the first time, raising concerns that further volatility could lie ahead as insider share lockup restrictions begin to expire in the coming weeks.
The stock closed at US$135.27 on Wednesday after falling as low as US$132.15 during the session, leaving it down 33% from its post-IPO record high despite remaining one of Wall Street’s most valuable companies with a market capitalisation of about US$1.8 trillion.
The decline comes ahead of the first major lockup expiry expected in early August, when employees and some early investors will be allowed to sell 911.5 million shares following the company’s first quarterly earnings report as a listed company. Those shares are currently worth around US$123 billion, exceeding the US$86 billion worth of shares currently available for trading.
Additional shares could also become eligible for sale if SpaceX’s stock remains above US$175.50 for at least five of 10 consecutive trading days through its earnings announcement. By Dec 8, the company’s freely tradable shares are expected to increase to about 40% of total shares outstanding, while the remaining 60%, including Elon Musk’s stake, will stay locked up until mid-2027.
Despite the recent weakness, investor sentiment towards the company remains largely positive. According to LSEG data, 27 of 32 analysts covering SpaceX have a buy recommendation, while four rate the stock as hold and one recommends selling.
Analysts point to SpaceX’s profitable Starlink satellite internet business, government launch contracts and Musk’s track record as reasons for its premium valuation, even after the company reported a net loss of nearly US$5 billion last year.
