Key facts
- SpaceX stock has fallen 46% from its peak valuation after its initial public offering.
- A major share unlock event, making up to 911.5 million shares available for trading, begins today.
- The value of the shares unlocked today is approximately $116 billion.
- Recent selling pressure was exacerbated by concerns over the company's AI spending following its earnings report.
- Despite recent declines, Wall Street analysts largely maintain a positive outlook with a consensus price target significantly above current levels.
SpaceX is facing a significant challenge as a substantial portion of its shares, valued at $116 billion, become available for trading today following the expiration of its post-IPO lockup period. This event comes after the company's stock experienced a dramatic fall of 46% from its peak valuation, erasing over $1.2 trillion. Initially, the stock's high valuation was a point of contention for investors. More recently, concerns over heavier-than-expected artificial intelligence spending, revealed after the company's earnings report, led to a 14% single-day decline.
The unlock today makes up to 911.5 million shares available, adding to the selling pressure. However, the market's reaction could be varied, with some early investors potentially cutting losses while others might hold on, hoping for a recovery. The situation is also being closely watched by short sellers, whose positions could be squeezed if selling is lighter than anticipated, potentially triggering a relief rally.
This initial unlock is just the beginning, with several more lockup milestones scheduled through November. Despite these pressures, Wall Street analysts maintain a generally optimistic view, with a significant majority recommending a buy rating and an average price target suggesting substantial upside potential. Firms like Bank of America and Oppenheimer highlight SpaceX's AI growth prospects, while others, like Bernstein, emphasize the company's ongoing project development pace.