SpaceX, which drew the attention of global capital markets with the largest initial public offering (IPO) ever, is approaching its first major lockup expiration. With its share price having fallen sharply in recent days, attention is focused on whether the hundreds of millions of newly sellable shares will add further downward pressure.
According to Reuters on the 5th (local time), SpaceX begins its lockup expiration on the 6th. On that day, up to 912 million shares out of the roughly 13.6 billion shares outstanding will become newly sellable. This is a scale that could more than double the number of shares currently traded on the market.
A lockup is a system that restricts insiders such as employees and early investors from selling shares for a certain period after an IPO. Typically in an IPO, share disposal is restricted for about 180 days after listing, after which the lockup is lifted all at once at a specific point in time. SpaceX, by contrast, chose to lift the lockup in multiple stages over about a year to reduce the shock of a large volume of shares flooding the market at once. Accordingly, even after this first release, the lockup is set to be lifted sequentially in line with earnings announcement schedules and other timing. About 12.9 billion shares are expected to be released from the lockup sequentially through around the middle of next year.
The market is watching the possibility that this lockup expiration will trigger full-scale profit-taking by early investors. As these investors secured their stakes at prices far below the offering price ($135), they are sitting on substantial paper gains. On Wall Street, it is known that investors have been making inquiries about selling their SpaceX stakes and then buying shares in the next big IPO prospects such as artificial intelligence (AI) firms Anthropic and OpenAI, and defense technology startup Anduril. Matt Kennedy, senior strategist at IPO research firm Renaissance Capital, said, "SpaceX employees and early investors hold enormous paper gains," adding, "The incentive to realize profits and diversify their investment assets is very strong."
If the shares released from the lockup actually translate into sales, it is likely to put considerable pressure on the stock price. Although SpaceX announced second-quarter results that beat market expectations, its share price has continued to weaken as the burden of large-scale investments for building AI data centers and other projects has come into focus, and it fell 13.61% on the 5th as well.
Andrew Chanin, CEO of ProcureAM, which runs a space industry exchange-traded fund (ETF), assessed, "This time a significant amount of stock will come onto the market," adding, "It will be an important test of whether early investors will continue to hold their stakes, believing in the company's long-term growth potential."
Some in the market analyze that which investors dispose of their stakes will be the key variable determining future investor sentiment. Founders Fund, Craft Ventures, and Alphabet are counted among SpaceX's major early investors, and the view is that if they move to sell in large volumes, it could be taken as a signal that confidence in the company's growth outlook has weakened.
However, many interpretations suggest that these investors are unlikely to move aggressively to sell. Gabriel Shahin, founder of Falcon Wealth Planning, said that after contacting SpaceX officials and employees, not many showed an intention to sell immediately, explaining, "If insiders actually retain their stakes, the market may take it as confidence in the company's long-term growth potential."
