SpaceX rebounds 7% after post-earnings sell-off; first batch of locked-up shares unlocks

Shares of SpaceX rebounded 7% on Thursday, 6 August, rising to an intraday high of $115.75 as the stock recovered part of the steep losses from the previous session when the company's massive AI-related spending overshadowed an otherwise strong quarterly performance.

Despite the recovery, the stock remains well below both its post-listing peak and its IPO price.

Another key event for the stock on Thursday was the expiry of the lock-up restrictions, which made more than 911 million SpaceX shares, worth nearly $100 billion, eligible for trading. The restrictions had previously barred insiders from selling their holdings.

The first tranche of unlocked shares is around 40% larger than the number of shares sold in the company's record-breaking IPO.

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

SpaceX shares had rallied sharply after the company's June listing, climbing from the IPO price to above $225 within days. However, the stock has since undergone a sharp correction, ending Wednesday's session at $108.27.

More share unlocks are ahead

Unlike most IPOs, where insiders are restricted from selling shares for up to 180 days, SpaceX's lock-up agreement allows up to 20% of restricted shares to be sold from Thursday, the second trading day after the company's quarterly earnings release.

While insiders are not obligated to sell their holdings, analysts believe the sharp increase in tradable shares could create additional selling pressure on the stock.

More shares are also set to enter the market in the coming months. According to the prospectus, 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, CNBC reported.

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.

Elevated AI investment clouds earnings optimism

A 13.6% plunge in the previous session, one of the stock's biggest single-day declines since listing, dragged SpaceX shares to an intraday low of $106 after the company's aggressive AI spending plans outweighed better-than-expected performance in the second quarter.

In its first earnings report since going public, SpaceX said it spent $18.4 billion on capital expenditures during the June quarter—a six-fold increase from a year earlier and well above analysts' expectations.

The bulk of the investment was directed toward expanding its AI infrastructure. The company also indicated that the elevated spending is unlikely to ease anytime soon.

Although SpaceX's AI business generated $2.6 billion in second-quarter revenue, more than three times the level recorded a year earlier, the segment remained loss-making, underscoring the high cost of scaling its AI operations.

(With inputs from Bloomberg and Reuters)

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