On August 6, the first batch of 911.5 million insider restricted shares in SpaceX officially became tradeable, potentially releasing around $100 billion in market value. However, the widely anticipated secondary sell-off did not materialize.
Instead of falling, the stock price rose about 5% at the open. Trading volume in the first half-hour reached approximately 93 million shares, equivalent to about 40% of the previous full trading day's total. The number of tradeable shares surged from roughly 639 million to about 1.55 billion, more than doubling the float, yet the price did not decline. SpaceX closed Thursday up 6.14%, with a total volume of 251 million shares, the highest since June 18.
The Foundation Of This Resilience Was Wednesday's Brutal Liquidation.
On Wednesday, SpaceX shares plummeted nearly 14% to $108.27 after its first post-IPO quarterly report revealed AI capital expenditure exceeded $18 billion, almost 40% higher than analyst expectations. Volume surged to about 200 million shares. Market participants noted that some short strategies were not purely based on deteriorating fundamentals but were aimed at the potential concentrated selling by early investors and employees following the lockup expiry. If actual insider selling is lower than expected, the risk of a short squeeze cannot be ignored.
However, the lockup expiry is far from over. This was just the first step in SpaceX's unique nine-stage, phased unlocking mechanism. Bernstein noted that this mechanism is "extremely complex," far different from the traditional single 180-day post-IPO lockup expiration. The largest release is scheduled for June 2027, when Elon Musk's approximately 6.4 billion Class A common shares will become tradeable. As of Wednesday, short interest in SpaceX stood at about 36% of the float, with paper profits exceeding $9 billion. Thursday's price rise suggests a short-term reprieve, but the long-term supply-demand battle has just begun.
Thursday's Counterintuitive Move: Why A $100 Billion Lockup Expiry Didn't Create A Dip
SpaceX shares opened about 5% higher on Thursday, with a volume of 93 million shares in the first half-hour, representing about 40% of the previous full day's total. Wall Street investment banks acted swiftly after Wednesday's crash. JPMorgan raised its price target from $225 to $240, Goldman Sachs set a target of $220, and Morgan Stanley reiterated its $300 target. At least six brokerages, including Morgan Stanley, maintained a buy rating. Combined with passive allocation demand from the Nasdaq 100 index inclusion, this created a buffer for Thursday's lockup expiry.
But the most fundamental buffer came from Wednesday itself. With the nearly 14% single-day plunge and volume hitting a new high since June 18 (which was then surpassed by Thursday's volume), marginal sellers were largely exhausted. Even after the stock price fell below the IPO price, early investors still held paper profits, and a lockup expiry does not automatically trigger selling.
Retail Versus Institutions: Two Different Answers To The Same Report
There is an overlooked footnote to Thursday's stability: Wednesday's crash itself was not a unanimous bearish signal. According to Vanda Research data, in the first hour of Wednesday's trading, retail investors net bought approximately $22.7 million of SpaceX stock. This was the third-highest figure among the stock's 37 opening sessions since its listing and more than three times the average first-hour net inflow. While institutions were cautious due to the surge in AI capex and near-term profit pressure, retail investors interpreted the aggressive spending as a signal of a higher probability of long-term success.
Brent Donnelly, founder of Spectra Markets, cited three comparable cases before the lockup expiry, noting that while the sample size was limited and the previous cases were much smaller than SpaceX, the first lockup expiry day in each case formed a buyable bottom. His assessment was that "the supply shock is more likely to be a misleading bearish signal than a truly effective negative factor."
The Nine-Stage Unlock: The Real Test Still Lies Ahead
This lockup expiry is far from the finish line for SpaceX. The company employs a nine-stage phased unlocking mechanism, with subsequent restricted shares set to be released over the coming months. The largest tranche is locked until June 2027, when Elon Musk's approximately 6.4 billion Class A common shares will be unlocked, significantly expanding the market float once again. Short sellers have not retreated due to the calm on the first unlock day. According to S3 Partners data, as of Wednesday's close, approximately 36% of SpaceX's float was sold short, generating cumulative paper profits of over $9 billion.
Market participants pointed out that some short strategies are not simply betting on a deterioration of fundamentals but are targeting the potential concentrated selling by early investors and employees post-lockup. If actual insider selling is lower than anticipated, the pressure from short covering could be significant.
A More Fundamental Question Than The Lockup
SpaceX's real challenge is not on the supply side. At its IPO in June, the market priced the stock around a "scarce space asset" narrative: the world's only reusable rocket company, Starlink covering tens of millions of users, and a near-monopoly on launches. However, the first quarterly report revealed another side: AI capital expenditure exceeding $18 billion, with the shadow of data centers looming larger than rocket exhaust. SpaceX is being redefined by the market from a "space company with AI" to an "AI computing infrastructure provider" – and the market is currently sensitive to the AI spending narrative.
Thursday's calm answered the question of "will it crash?" – it did not. But it did not answer the question of "what is it worth?" The $135 IPO price, breached on Wednesday, has yet to be recovered. This level is the baseline that both bulls and bears are now recalibrating. The market's future direction will depend on whether new capital can continuously absorb the gradually released lockup shares and when SpaceX's AI investments begin to translate into visible returns.
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