SpaceX shares gain 35% after lock-up expiry, climb back above IPO price

It appears that early investors in SpaceX remained confident in the company's growth potential, even as shares worth around $100 billion became eligible for trading after lock-up restrictions expired earlier this month. The stock has since gained more than 30%, moving back above its IPO price.

In just five trading sessions since the lock-up expiration on August 6, SpaceX shares surged 35%, adding roughly $500 billion to the company's market capitalisation and climbing back above their $135 IPO price.

The rally has defied concerns about an impending wave of selling and offered investors some optimism that upcoming lock-up expirations may not trigger the heavy selling pressure that had been feared.

Last week, around 911 million SpaceX shares became eligible for trading, roughly 40% more than the number of shares sold in the company's record-breaking IPO.

The release increased the company's free float to 1.55 billion shares, from 639 million shares that were available for trading when Space Exploration Technologies Corp debuted on Nasdaq.

Elon Musk's space, satellite and artificial intelligence company has experienced a volatile run in the stock market since pricing its record $86 billion IPO on 11 June. The shares surged in the first few days of trading before reversing course and shedding more than $1 trillion in market value through early August.

SpaceX shares defy lock-up selling fears; more share unlocks ahead

The process for unlocking SpaceX shares differs from the typical post-IPO arrangement, under which insiders are generally restricted from selling shares for 180 days. Given the company's size and its potential to significantly affect the market, SpaceX's management and bankers have staggered the lock-up expirations across a nine-stage structure.

Following the first batch of lock-up expirations, another 319 million shares could become eligible for trading on 20 August, followed by around 700 million shares in September and a similar number in October.

In June 2027, one of the final scheduled lock-up expirations will make Elon Musk's 6.4 billion Class A shares eligible for trading.

SpaceX shares plunged 14% on the day before the expiration, but the culprit actually appears to be the company’s first earnings report, and specifically its higher-than-expected capital expenditures for artificial intelligence.

However, the results also contained some good news, including a large beat in revenue and a better-than-expected loss per share. Those figures were likely another catalyst in the stock’s runup since then.

Musk, as he so often does, also offered some bold predictions on the earnings call. In particular, he said he expects SpaceX’s revenue to reach a more than $100 billion annual run rate by the end of the year and $1 trillion in revenue by 2030 or possibly 2029.

(With inputs from Bloomberg)

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