Don’t Let the Two-Trillion Valuation Go to Your Head: SpaceX Faces First Wave of Lockup Expiries in August; If Share Price Holds at $175.5, Selling Pressure Will Surge to 30%.
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SpaceX’s record-breaking IPO, raising $85.7 billion, has pushed its market capitalization above $2 trillion amid strong demand. However, the stock’s current volatility is driven by an extremely low 4.3% free float. While anticipated Nasdaq 100 inclusion in July may trigger passive fund inflows and short-term price premiums, significant risks remain. Investors should monitor a staggered share unlock beginning in mid-August and a major 28% float expansion in late October. These events will fundamentally shift supply-demand dynamics, likely increasing downward pressure and volatility as the stock transitions from sentiment-driven speculation toward fundamental-based pricing.
Tradingkey - SpaceX (SPCX), the largest IPO in history, successfully debuted on Nasdaq last Friday, with its shares surging up to 30% intraday before closing up 19% at $160.95, bringing its total market capitalization past $2 trillion.
On Monday, SpaceX officially disclosed that the underwriters for this IPO have fully exercised their over-allotment option, bringing the final total funds raised to $85.7 billion and continuing to break the global IPO record. The additional capital raised through the over-allotment option alone exceeds the entire offering size of most technology IPOs.
The decision by underwriters, including Goldman Sachs and Morgan Stanley, to fully exercise the option was not a routine procedural action. Instead, it was an active decision based on the actual secondary market trading performance post-listing, confirming that market demand far exceeded estimates during the offering phase.
Behind the stock's frantic rally, there are still risks that warrant attention. In the initial stage of SpaceX's listing, its free float accounted for only about 4.3%, meaning that small capital inflows or outflows can significantly move the stock price. Large institutional capital needs to accumulate only a small share to dominate price movements. However, as restricted shares are gradually unlocked and the public float continues to expand, the stock price will face downward pressure.
Amid the market frenzy, investors still need to view this rationally. Investing requires not only analyzing current developments but also taking a forward-looking approach to monitor potential future catalysts.
The following two key dates are crucial, as they directly relate to capital entry and share expansion, and will have a massive impact on the stock price.
SpaceX Set to Be Included in Nasdaq 100 Index
According to the latest Nasdaq rules, starting May 1, if a listed company ranks among the top 40 by market capitalization, it can be fast-tracked into the Nasdaq 100 Index as early as the 15th trading day. Applied to SpaceX, this means it would be included in the index around July 7.
In our recent article, " 15 Days After SpaceX Listing, Index Funds Will Take 30% of Floating Shares, What It Means for Retail Investors? ", we analyzed the relevant impacts.
Simply put, SpaceX's fast-track inclusion into indices like the Nasdaq 100, combined with an extremely low free float, will trigger massive, concentrated buying by passive funds. This drives up the stock price and its index weight, creating a self-reinforcing loop while crowding out existing constituent stocks. In the short term, this creates a price premium but also amplifies volatility, presenting significant downside risks when sentiment cools or lock-up periods expire.
Late July will see the first large-scale share unlock.
After SpaceX releases its first quarterly report since going public (the second-quarter report, expected in early-to-mid August), the company will face its first massive share unlock since its listing.
To avoid the heavy selling pressure of a concentrated lock-up expiration, SpaceX bypassed the traditional 180-day lump-sum unlock rule common in US markets, opting instead for a staggered, multi-phase unlock scheme that releases approximately 7% of outstanding shares at regular intervals.
However, the scale of the first unlock wave in mid-August far exceeds the planned cadence. While the initial unlock quota specified in the prospectus is 30%, after excluding the 42% stake held by Musk himself, the market expects the actual proportion of insider shares (including employee stock options and shares from prior asset swaps) entering the market to be between 10% and 15%.
One hedging clause is particularly noteworthy: if the stock price surges post-IPO and consistently maintains a premium of at least 30% over the IPO price (i.e., staying above $175.50), the first-round unlock quota will increase by an additional 10%, which would push the overall selling pressure of the first wave directly to around the 30% level.
Subsequently, in late October, around the time SpaceX reports its second post-listing quarterly results, the market will face the largest wave of restricted share unlocks of this cycle, equivalent to approximately 28% of the total share capital. This massive lock-up expiration will completely disrupt the supply-demand dynamic characterized by the extreme scarcity of public float during SpaceX's early post-IPO phase.
Compared to the current free float of just 4.3%, the volume of tradable shares will expand dramatically post-unlock, placing significant downward pressure on the valuation premium previously inflated by share scarcity and passive inflows.
Market analysts note that if the unlocked shares are primarily held by early-stage investors sitting on substantial paper profits, there will be a strong inclination to lock in gains, meaning concentrated short-term selling pressure could easily exacerbate stock price volatility. This juncture is also poised to become a watershed moment for the stock, driving its valuation away from sentiment-driven speculation back toward fundamental-based pricing.
This content was translated using AI and reviewed for clarity. It is for informational purposes only.
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