SpaceX founder Elon Musk addresses members of the media during a press conference announcing new developments of the Crew Dragon reusable spacecraft, at SpaceX headquarters in Hawthorne, California, Oct. 10, 2019.
Philip Pacheco | Afp | Getty Images
Early SpaceX investors will have their first chance to cash out a portion of their holdings on Thursday as initial lockup restrictions expire, potentially putting pressure on a stock that’s already more than 50% off its high from mid-June.
Just over 911 million SpaceX shares will be available for trading, representing about 7% of shares outstanding. It’s more than the 639 million shares that were sold in the company’s record IPO.
Elon Musk’s reusable rocket maker initially saw its stock price shoot up to $150 as it hit the Nasdaq in June before surpassing $225 days later. But it’s been a rocky eight weeks since then, with the shares closing on Wednesday at a low of $108.27. The stock plunged after SpaceX said in its first earnings report late Tuesday that capital expenditures were more than twice as high as revenue.
Greg Martin, co-founder of Rainmaker Securities, told CNBC in an email that the stock’s “near-term path” may be more affected by the lockup lifting than any fundamentals or strategy.
And more float is coming. On Aug. 20, another 319 million shares could unlock, according to the prospectus, followed by roughly 700 million in September and close to that number in October.
Musk, the world’s richest person, is by far the biggest holder of SpaceX stock with more than 6 billion shares. His holdings are locked up until June 2027.
Regarding the first batch of unlocked shares, analysts at Mizuho noted in a report on Wednesday that, “While the step-up in potential supply is meaningful, we think investors should understand that shares becoming eligible for sale does not mean the full tranche will be offered into the market.”
One investor looking to sell is Jessie Bates III, a safety for the Atlanta Falcons.
Bates, 29, said he paid about $150,000 in 2022 for shares at a valuation of $127 billion. SpaceX is currently valued at $1.43 trillion, potentially making Bates’ stake worth over $1.5 million. In an emailed statement sent by his publicist, Bates said he plans to sell all of his shares to “lock in gains.”
Michael Ledo manages Bates’ investments as CEO of the RISE Family Office. Ledo said Bates’ portfolio has also included stakes in pre-IPO companies OpenAI, Anthropic, Databricks, Cart.com and Turo. RISE says it focuses on “helping athletes build lasting wealth, become business leaders and build strong families.”
Bates said via his publicist that if anything could convince him to buy again, it may be more strategic acquisitions that could open up growth opportunities. In February, SpaceX merged with Musk’s xAI in a deal that valued the combined entity at $1.25 trillion. And prior to the IPO, SpaceX agreed to buy Cursor for $60 billion in a transaction expected to close this quarter.
WATCH: SpaceX sings on soaring AI costs
