Key Takeaways
The first wave of lockup restrictions for SpaceX expires on Thursday, releasing over 911 million shares from sale restrictions, which allows early investors to freely cash out. Wall Street is closely monitoring whether insiders will seize the opportunity for large-scale selling. Atlanta Falcons player Jessie Bates III announced plans to fully liquidate his SpaceX holdings, which he purchased for $150,000 in 2022.
On Thursday, early investors in SpaceX received their first opportunity to monetize holdings as the initial lockup period expired. The stock has fallen more than 50% from its mid-June peak, and the unlocking of shares could add further downward pressure. A total of over 911 million SpaceX shares are entering the market, representing roughly 7% of the company's total equity, a volume exceeding the 639 million shares sold in the record-breaking IPO.
The reusable rocket company founded by Elon Musk listed on the Nasdaq in June, with its stock initially surging to $150 before quickly breaking through $225 within days. However, the stock has weakened over the subsequent eight weeks, closing at $108.27 on Wednesday. On Tuesday evening, SpaceX released its first earnings report, revealing capital expenditures totaling more than double its revenue, which triggered a sharp decline in the stock price.
Greg Martin, co-founder of Rainmaker Securities, said in an email that the lockup expiration is more likely to dictate the stock's short-term performance than fundamentals or corporate strategy. Additional share lockups are scheduled to expire: according to the prospectus, 319 million shares will be released on August 20, followed by approximately 700 million shares in September, with a similar volume expected in October. The world's richest man, Musk, is SpaceX's largest shareholder, holding over 6 billion shares, with a lockup period extending until June 2027.
Analysts at Mizuho Securities commented on the lockup expiration in a Wednesday note: "The potential for a significant increase in tradable supply is real, but investors need to understand that eligibility to sell does not mean all these shares will be dumped into the market."
Atlanta Falcons safety Jessie Bates III is among the investors planning to sell. The 29-year-old Bates said he invested approximately $150,000 in the stock in 2022, when the company was valued at $1.27 trillion. With SpaceX's current valuation at $1.43 trillion, that holding could be worth over $1.5 million. Bates, through a publicist, stated that he intends to sell all of his shares to lock in investment gains.
Michael Ledo, who runs the RISE family office managing Bates's investments, revealed that Bates's portfolio also includes stakes in several pre-IPO companies: OpenAI, Anthropic, Databricks, Cart.com, and Turo. The RISE institution's mission is to help athletes build long-term wealth, transition into business management roles, and solidify family financial planning. Bates indicated that he might consider buying back into SpaceX if the company pursues more strategic acquisitions and opens up new growth avenues.
In February, SpaceX completed a merger with xAI, Musk's artificial intelligence firm, valuing the combined entity at $1.25 trillion. Prior to the IPO, SpaceX also finalized a $60 billion acquisition of Cursor, a deal expected to close this quarter.