In New York on Thursday, Elon Musk’s space and artificial intelligence venture saw more than 900 million SpaceX shares unlock for trading, pushing the stock up over 6 percent as eager retail investors rushed to scoop up the fresh wave of market supply.
For context, the sudden upward move came immediately after the stock tumbled nearly 14 percent on Wednesday to close at an all-time low of $108.27 per share. That wild slide followed a Tuesday earnings report that highlighted larger than expected capital expenditures on artificial intelligence initiatives, leaving Wall Street bracing for potential chaos as early investors and employees finally gained permission to unload their holdings.
The lockup expiration freed up as many as 911.5 million Class A shares, effectively more than doubling the stock’s circulating supply. At the time of the company’s record-breaking initial public offering in June, SpaceX sold roughly 640 million shares, representing less than 5 percent of its total equity. With Thursday’s release, roughly 12 percent of the company’s total shares are now available for public trading.
Why SpaceX Shares Bounced Despite The Massive Supply Shift
Market observers noted that the sharp mid-week drop created an irresistible entry point for individual traders who have steadily supported the company since its market debut. Viraj Patel, global macro strategist at Vanda, reported that Wednesday and Thursday marked the strongest retail buying activity for the stock since its first three days of public trading. He added that retail investors have been net buyers every single day the stock has traded, showing no signs of abandoning one of their newest market favorites.
At the same time, experts pointed out that multiple conflicting forces were hitting the stock simultaneously. Ryan Lee, senior vice president for product and strategy at Direxion, explained that the convergence of heavy AI spending announcements, extreme price swings, and the arrival of natural sellers among long-time employees created an unpredictable trading environment.
Employees who acquired equity years before the initial public offering target price of $135 per share still hold substantial profits, giving them clear incentive to cash out portions of their holdings regardless of recent volatility. Yet, an influx of shares does not automatically guarantee a continuous downward slide. Jay Ritter, professor emeritus at the University of Florida and an expert in initial public offerings, noted that if selling pressure turns out to be lighter than anticipated, stock prices can actually climb when lockup periods expire.
SpaceX is using a tiered calendar for releasing shares over the next year rather than sticking to the standard 180-day waiting period. Across its capital structure, the firm holds more than 7.5 billion Class A shares alongside more than 5.5 billion Class B shares. As subsequent unlock phases unfold throughout the year, more than 5 billion Class A shares could ultimately reach the public market.
What The Lockup Expiry Means For SpaceX Shares On Wall Street
The rapid expansion of tradable supply carries major implications for how the stock fits into broad market indexes. Having joined the Nasdaq 100 earlier this summer, the company currently holds a weighting of about 1 percent in the index. Following Thursday’s expansion of public shares, research from TD Securities indicates that the company’s weighting could climb above 3.5 percent when the index completes its quarterly rebalance in September.
That prospective increase gives index-tracking funds more reason to adjust their positions, adding another layer of complexity to price movements. Peter Haynes, head of index and market structure research at TD Securities, emphasized that the central question facing market participants is how the share price will react over the coming weeks, something no analyst can predict with complete certainty.
Longer-term investors appear largely unfazed by the short-term fluctuations caused by lockup schedules and heavy capital spending on technology infrastructure. Justus Parmar, founder and chief executive officer at Fortuna Investments and a SpaceX investor, stated that while a flood of new shares can create brief headwinds, the underlying strength of the core business and execution on long-term goals remain what matters most.
Extended lockup agreements covering executive holdings will remain in effect until 2027, while Elon Musk’s personal stake, which represents more than 40 percent of the company’s total valuation, stays locked up until one full year after the initial public offering.
Athaliah Mejares is a writer with experience covering news and feature stories across a range of topics. As a former junior editor for International Business Times UK, she contributed articles on current events, entertainment, and trending stories, delivering timely and engaging content to a global audience. She is passionate about clear, accurate storytelling and creating content that keeps readers informed.
