Early investors in SpaceX are poised to gain as much as $1 trillion when restrictions on selling their shares expire this week, marking one of the largest potential payouts in stock market history. The expiration of the 180-day lock-up period on Thursday will allow insiders who acquired SpaceX shares prior to its public listing to begin selling their holdings.
SpaceX debuted on the Nasdaq on June 12 with shares priced at $135 each. The stock initially surged above $200 but has since declined to around $108, valuing the company at approximately $1.5 trillion. Despite the recent slump, early private investors who purchased shares during a private sale last year, when the firm was valued at about $400 billion, stand to nearly quadruple their investment.
The company's valuation received a significant boost earlier this year following its acquisition of the artificial intelligence startup xAI, a move that increased SpaceX’s worth to roughly $1 trillion and generated substantial returns and equity stakes for early shareholders.
Recently, SpaceX shares have experienced volatility due to broader shifts away from AI stocks and an aborted launch of its Starship rocket caused by engine issues. Russ Mould, investment director at AJ Bell, characterized the share price movements since the public debut as "bumpier than a ride in one of its rockets re-entering the atmosphere."
To mitigate the impact of a sudden influx of shares hitting the market, SpaceX has implemented a phased release schedule for early investors. Some will only be able to trade their shares by early December, when additional billions of shares could become available. Elon Musk, who holds the majority of SpaceX stock and at one point briefly became the world’s first trillionaire, is barred from selling his shares until June next year.
Concerns persist that the large volume of shares entering the market following the lock-up expiration might further depress the stock price. Compounding that anxiety is the company’s impending release of its first quarterly earnings report since going public, scheduled two days before the lock-up lifts. Analysts anticipate that while recent quarterly sales may approach $7 billion, SpaceX remains years away from profitability due to substantial investments in data centers supporting its AI initiatives.
The firm reported a $4.3 billion loss on $4.7 billion in sales in the previous quarter. Morgan Stanley analysts note that the share price decline implies investors currently assign negligible value to SpaceX’s AI business, instead focusing on its Starlink satellite internet operations. Despite this, Morgan Stanley’s analyst Adam Jonas views the current market sentiment as overly pessimistic, suggesting it presents a compelling buying opportunity. Jonas projects SpaceX shares could reach $300, attributing half of that value to its AI division.