SpaceX Falls Below IPO Price? Down 23% in One Month, Underperforming 90% of Major IPOs – August Unlocking to Be a Test

SpaceX (SPCX-US) has seen its post-IPO share price performance become one of the weakest major U.S. IPOs since the financial crisis, just over a month after its historic initial public offering.

According to analysis by Barron's, among U.S. IPOs with a market cap of at least $1 billion since July 2009, SpaceX has underperformed over 90% of them in the first 27 trading days after listing—placing it in the bottom 10%.

In the first 27 trading days after its debut, SpaceX shares fell 23% from their first-day closing price of $161, and more than 40% from their peak of $225.64. In contrast, the average return for the 955 IPOs analyzed during the same period was 0.8%.

On Thursday (23rd), the stock rose 2.6% to $118.24 per share, but has already fallen below its $135 IPO price. Unlike most IPOs, which are primarily allocated to institutional investors or major brokerage clients, SpaceX's IPO allowed a large number of retail investors to participate in the offering.

The August Unlocking Test

However, weak initial performance does not necessarily reflect long-term prospects. Meta Platforms (META-US) also experienced a sluggish start post-IPO but eventually delivered strong returns for long-term investors—though recovery was not immediate.

Meta faced renewed pressure on its stock price months later when its lock-up period ended, allowing insiders to sell shares.

SpaceX now faces a similar challenge. Starting in August, a large volume of previously restricted shares will begin to unlock, with billions of shares expected to enter the market. With demand already weak, the increased supply could further depress the stock price.

However, not all shares will be released at once. Founder Elon Musk’s shares cannot be sold until June 2027 and are not eligible for early release. Musk and other major pre-IPO investors collectively hold around 7.8 billion shares, representing approximately 60% of the 13 billion shares outstanding post-IPO.

Other investors face shorter lock-up periods. Some shares will begin to unlock after SpaceX announces its Q2 earnings on August 4, with the remainder released in batches over the following months. Additionally, lead underwriter Goldman Sachs has the right to waive certain lock-up restrictions before the period officially ends.

Analysts at Renaissance Macro note that SpaceX’s phased unlocking mechanism is more investor-friendly compared to the typical 180-day full unlock, but it cannot fully eliminate selling pressure. Historical trends show that major lock-up expirations often weigh on momentum stocks in the weeks before and after the event.

On the other hand, some believe that SpaceX’s inclusion in major stock indices could attract passive buying from index-tracking funds, helping to offset some of the selling pressure.

SpaceX is already included in the Russell 1000 Index and the Nasdaq 100 Index. If it remains publicly listed for one year and meets S&P 500’s profitability requirements, it could be added to the S&P 500 Index. Given that trillions of dollars in assets track the S&P 500, inclusion could bring substantial long-term passive investment inflows.