Over 900 million SpaceX shares become available for trading after a lockup period. The move more than doubles the free-float and follows a sharp drop in the stock price. Investors and employees now face new decisions amid ongoing volatility.
SpaceX faces a pivotal moment as more than 900 million shares are released for public trading, sharply increasing the number of shares available on the market. The move comes just weeks after the company’s historic IPO, which initially offered less than 5% of its total shares. The scheduled unlocking, set for Thursday, allows early investors and employees to sell their pre-IPO holdings, potentially adding further pressure to a stock that has already seen significant declines.
On Wednesday, SpaceX shares (SPCX) fell nearly 14%, marking the second worst trading day in the company’s brief public history. The closing price of $108.27 per share reflects a drop of about 50% from the record high reached on June 16, and a 20% decrease from the IPO target price of $135. The decline follows the company’s latest earnings report, which revealed higher-than-expected spending on artificial intelligence projects, and comes as the market braces for the impact of the lockup expiry.
The unlocking of up to 911.5 million shares more than doubles the free-float, setting the stage for increased trading activity and possible further price swings. According to market analysts cited by CNN, the combination of new shares entering the market and recent financial disclosures has created a period of heightened volatility. Employees and early investors, many of whom acquired shares at prices well below current levels, now have the option to realize gains despite the recent downturn. However, some may choose to hold their positions, betting on the company’s long-term prospects.
SpaceX’s approach to share unlocks differs from the standard 180-day lockup period seen in most IPOs. Instead, the company has adopted a staggered, tiered schedule, with several more unlocks planned over the coming year. SpaceX has a total of 7.571 billion Class A shares, primarily held by employees and investors, and nearly 6 billion Class B shares, mostly controlled by Elon Musk and top executives. The current unlock is the first in a series that could see more than 5 billion Class A shares become available by the end of the year. Shares held by Musk, representing over 40% of the company’s value, remain locked until one year after the IPO.
The increase in publicly available shares also affects SpaceX’s position in major stock indexes. The company joined the Nasdaq 100 earlier this summer with a weighting of about 1%. With the new shares entering the market, its weighting could rise above 3.5% after the index’s September rebalance, depending on share price performance. The Nasdaq 100 adjusts its components based on market value and free-float, making the unlock a significant event for index tracking funds and institutional investors.
Market participants note that while a surge in available shares can temporarily weigh on prices, the underlying business fundamentals and leadership remain central to long-term performance. The coming months will test investor confidence as further unlocks approach and the company continues to invest heavily in artificial intelligence and space technology.
For context, lockup expirations are a common feature of IPOs, designed to prevent a sudden flood of shares from destabilizing the market. However, SpaceX’s staggered model is less typical and may lead to recurring periods of volatility as each tranche becomes available. The company’s rapid ascent to public markets and its unique share structure have drawn significant attention from both retail and institutional investors. As the free-float expands, SpaceX’s influence within the Nasdaq 100 and broader market indices is set to grow, potentially amplifying the impact of its share price movements on the wider market.
