SpaceX shares dipped below their IPO price this week for the first time since the company's blockbuster public debut, a move analysts are calling an ominous sign as the rocket and internet company faces further potential volatility in early August, when a wave of insider shares becomes eligible for trading.
The Numbers
SpaceX stock dipped as low as $132.15 before closing at $135.27 on Wednesday, marking a 33% decline from its record close in the days immediately following its $75 billion IPO on June 11. Despite the pullback, the stock remains valued at 49 times expected revenue, one of the priciest valuations on Wall Street by that measure — well above Tesla's roughly 15 times multiple.
A Historically Tiny Float
SpaceX's IPO was the largest in U.S. history, but the company made less than 5% of its shares available for public trading, creating intense competition for a scarce supply that helped push its valuation to $2.1 trillion on its first Nasdaq trading day. That scarcity-driven dynamic is now set to reverse sharply as lockup restrictions begin lifting.
The Lockup Schedule Explained
Rather than using the standard single 180-day lockup most IPOs rely on, SpaceX built an unusually complex, staggered release schedule spanning 15 separate unlock dates. The first major tranche arrives shortly after the company's yet-to-be-scheduled second-quarter earnings report, expected in early August, when rank-and-file employees and some early investors become free to sell roughly 911.5 million shares — currently worth about $123 billion, more than the entire $86 billion of shares presently available for trading on the Nasdaq. A separate, smaller tranche of about 455.8 million shares could unlock even earlier if the stock trades above $175.50 for at least five of 10 consecutive trading days before that earnings report. Additional 7% employee tranches are scheduled for late August, September, and October, with the standard 180-day lockup batch clearing in December. Notably, Elon Musk's own massive stake remains locked separately until mid-2027, meaning the company's single biggest potential source of selling pressure stays off the table for now.
Why the Structure Matters
Unlike companies such as Airbnb, DoorDash, Reddit, and Snowflake, which shortened or staggered their lockup periods to soften the impact of insider selling, SpaceX built an especially elaborate schedule of price- and earnings-triggered releases. Notable Capital managing partner Hans Tung, an early SpaceX investor, said the design appears intended to let shareholders "ease out" gradually in tranches rather than dumping everything at once. He noted that some early backers will likely hold for long-term compounding, while others who invested five to 10 years ago will probably sell some shares to demonstrate liquidity.
Bulls vs. Bears on What Comes Next
Wall Street remains split on how the lockup expirations will play out. Infrastructure Capital Advisors CEO Jay Hatfield called current levels "relatively safe to at least be involved from a trading perspective," while cautioning against overweighting the stock given the coming lockup. Of 32 analysts covering the stock, 27 rate it a buy, with just one sell rating and four neutral, according to LSEG data — reflecting continued institutional confidence despite the near-term supply overhang. Bullish investors point to SpaceX's profitable Starlink internet business, its government rocket launch contracts, and Musk's track record of investor loyalty as justification for the premium valuation, even though the company posted a net loss of nearly $5 billion last year.
Bears are considerably more skeptical. Veteran investor George Noble has argued SpaceX's fair value is closer to just $30 a share, calling the IPO structure "the largest exit liquidity event in history" and warning that rapid inclusion in major indices like the Nasdaq-100 forced passive funds to buy aggressively, creating what he describes as an artificial short squeeze now facing a roughly 900% increase in tradable float. The Motley Fool has separately noted that SpaceX's price-to-sales ratio already exceeds that of any S&P 500 company, despite the company not being profitable — and, notably, may not qualify for S&P 500 inclusion at all given current index rules requiring profitability.
Historical Context Offers Some Reassurance
A Reuters analysis of 50 high-profile U.S. IPOs since 2010 found that companies whose shares fell below their IPO price within the first two months of trading went on to underperform those that didn't — but still posted gains in most cases. Of the 50 companies studied, 21 fell below their IPO price early on; those stocks posted a median gain of 61% since their debut, compared to a 112% median gain for the remaining 29 that never dipped below their offer price.
What's Next
With SpaceX's first-ever quarterly earnings report as a public company expected in early August, that release is shaping up as the key event to watch — both for what it reveals about the business itself and for triggering the first major wave of insider share unlocks. As one analysis put it, the coming earnings report will offer the first real test of insider conviction: if early backers and employees hold their shares through the initial unlock window, it signals confidence in the company's roughly $2 trillion valuation; if they sell in large numbers, it suggests the opposite. Investors will be watching closely through the fall as additional lockup tranches continue rolling out via September and October, before the standard 180-day lockup finally clears in December.