900 Million Shares of Potential Sell-Pressure Arrives! SpaceX's First Earnings Report Debuts on August 4

SpaceX (SPCX-US), the space and defense contractor led by Elon Musk, saw its shares rise over 7% on Tuesday (21st), attempting to halt a seven-day losing streak. The company announced it will release its first post-IPO earnings report on August 4, the same day the first phase of its stock lock-up period expires, potentially allowing up to 911.5 million shares to be sold.

SpaceX confirmed the date of its first earnings report on Monday. Unlike typical IPOs where insider share lock-up periods last 180 days, SpaceX has adopted a phased unlocking system, allowing insiders to sell shares in batches earlier, aiming to avoid a flood of shares hitting the market at once and triggering heavy sell pressure and sharp price volatility.

Under the rules, after the first earnings report, investors can sell 20% of their lock-up eligible shares, amounting to up to 911.5 million shares. If SpaceX’s stock closes above 30% of its IPO price of $135 per share on at least five of the ten trading days prior to the earnings release, an additional 10% of shares can be unlocked.

With the first unlock approaching, short positions have surged, nearing one-third of the publicly traded shares.

SpaceX went public in June at $135 per share, raising $85.7 billion, making it the largest IPO in history. However, after peaking at $225.64 intraday and closing at a record high of $211.39 on June 16, the stock has sharply declined. As of Monday’s close, the price has nearly halved from its intraday peak and dropped 43% from its highest closing price.

The stock plunge has also impacted Musk’s net worth. According to Forbes’ real-time billionaire list, Musk’s net worth briefly surpassed $1 trillion on June 12 but had dropped to approximately $786 billion by Monday.

Due to the lock-up period limiting tradable shares, SpaceX has recently become a prime target for short sellers, with short positions approaching one-third of the public float. As the stock price falls, short sellers continue to increase their bets.

On Monday, Musk fired back on social platform X, stating that institutions maintaining large short positions on SpaceX have a “very low probability of survival.” However, the first phase of stock unlocking could significantly increase market supply, and investors will closely watch whether insiders choose to sell and how the additional float impacts the stock price.

Rocket Tests and AI Business to Be Key Focus in First Earnings Report

In addition to the stock unlock, SpaceX has recently canceled multiple rocket launches, drawing market attention. The company had planned to launch 24 Starlink satellites into low Earth orbit using its Falcon 9 rocket on Tuesday, after canceling the mission on Monday just before liftoff—marking the second launch cancellation within a week.

SpaceX also plans to launch its large Starship rocket on Thursday. The company aborted the mission last week due to engine ignition failure. Musk said some engines failed to start, triggering the automatic abort mechanism. SpaceX is now adjusting the rocket’s propulsion system to resolve the engine issues.

Starship is central to SpaceX’s future development. As the largest rocket ever built and flown, it is crucial for expanding the Starlink satellite network and fulfilling NASA’s Artemis program contract, which aims to return astronauts to the Moon by 2028. Musk has called Starship the “holy grail” of space travel, envisioning its use for space tourism and crewed Mars missions.

Investors will also scrutinize SpaceX’s rapidly expanding cloud computing business. In February, the company acquired Musk’s AI startup xAI, rebranding it as SpaceXAI, and took ownership and operational control of a large data center and power plant in the Memphis area. Google (GOOGL-US), Anthropic, and Reflection have signed contracts to lease SpaceXAI’s excess computing capacity, and the company is reportedly negotiating with the Pentagon to provide computational power.

Additionally, the market is closely watching SpaceX’s collaboration with Tesla (TSLA-US). The two companies plan to build a chip factory, Terafab, in Grimes County, Texas, with Tesla leading R&D and SpaceX handling manufacturing. Some Musk supporters even anticipate a full merger, and SpaceX COO and President Gwynne Shotwell has stated that a merger would make Musk’s work easier.