Key facts
- SpaceX stock has recovered to trade above its $135 IPO price.
- The stock has gained over 25% in August.
- Over 911 million shares became available for trading after a lockup period expired last Thursday.
- Retail investors sold a net $4.5 million in SpaceX shares on Friday, the first net selling since the IPO.
- Argus Research initiated coverage with a 'Buy' rating, and Morgan Stanley maintained a $300 price target.
SpaceX's stock has recovered to trade above its initial public offering price of $135, signaling a dissipation of concerns over insider selling. The stock saw a nearly 3% increase on Monday, pushing it back above the key milestone after struggling earlier in the session. SpaceX shares have experienced a significant rally in August, gaining over 25%, and a 15% surge last Friday helped to offset losses incurred in July.
Last Thursday marked the expiration of the first lockup period, which would permit insiders and early investors to sell more than 911 million shares. However, the anticipated bearish impact has not materialized, with substantial selling pressure failing to emerge. Data indicates that while retail investors initially bought SpaceX shares at the IPO and in subsequent weeks, some took profits on Friday by selling into the rally. Jai Malhi, a senior equities strategist at Vanda Research, noted that this net selling by retail investors is not unusual during stock rallies and could represent a short-term rotation or profit-taking.
Malhi also observed that the selling pressure following the lockup expiration was less intense than anticipated. He suggested that some holders might be hesitant to sell until prices recover further, especially given the current stock levels. Investors have expressed mixed feelings about selling as lockup periods expire. Shay Baloor, chief market strategist at Futurum Equities, stated that the market's reaction suggests the anticipated wave of insider sales was not as damaging as many had positioned for. Nicolas Owens, an equity analyst at Morningstar, pointed out that not all shares made available by the lockup expiration have necessarily been sold, and some index funds may have been buyers to adjust their weights based on the increased free float.
Despite concerns over the company's massive artificial intelligence spending plans, Wall Street coverage has provided support for a bullish argument. Argus Research recently initiated coverage of SpaceX stock with a 'Buy' rating, and Morgan Stanley has maintained its $300 price target.