SpaceX Rises 4.5% as Over 7 Billion Shares to Unlock in September

As reported by Barron's, SpaceX (SPCX-US) saw its stock price rise on Monday (17th), with the market focusing on another batch of shares set to be unlocked.

Elon Musk's rocket and AI company, SpaceX, saw its stock price rise 4.5%, closing at $146.23. On the same day, the S&P 500 and Dow Jones Industrial Average both fell by about 0.5%.

This stock price increase comes as approximately 3.19 billion shares held by early investors and company insiders are set to become tradable in the market.

In early June, SpaceX issued approximately 5.56 billion new shares to the public, raising about $75 billion, excluding the underwriters' over-allotment option. At that time, SpaceX's total outstanding shares were approximately 132 billion, so this additional issuance represents only a small portion.

Generally, after a company goes public, insiders and early investors are typically subject to a lock-up period during which they cannot immediately sell their shares. Some companies have a 180-day lock-up period after the IPO. SpaceX adopts a phased unlocking approach, gradually releasing relatively small amounts of shares at different times.

On August 6, approximately 9.12 billion shares of SpaceX stock were unlocked and became tradable. On August 20, another approximately 3.19 billion shares will be unlocked.

In September, over 7 billion shares will be unlocked, and in October, over 6.5 billion shares will be unlocked. By the end of the year, a total of approximately 49 billion shares of SpaceX stock will be tradable. This represents about 70% of the SpaceX shares not held by Musk.

SpaceX's initial trading was primarily influenced by stock supply and demand. Investors have been concerned that early investors might cash out after the unlock, leading to cautious buying of SpaceX shares before the unlock. This is also one of the reasons why SpaceX's stock price once fell below $105 in July, far below the IPO offering price of $135.

However, after SpaceX released strong second-quarter financial results on August 4, the stock price began to recover. After the first batch of shares was unlocked on August 6, the stock price further strengthened.

In the week SpaceX released its financial report, the stock price rose 23%. In the past week, it rose another 5%, making this space company achieve consecutive weekly gains for two weeks. Before this rebound, SpaceX had experienced four consecutive weeks of declines.