SpaceX Faces Another Insider Share Unlock as 319 Million Shares Become Eligible for Sale on Monday, Oct. 26

NEW YORK — SpaceX, which completed the largest initial public offering in history in June, is approaching another milestone that could put pressure on its stock: the release of hundreds of millions of shares held by company insiders.

About 319 million shares held by early-release-eligible insiders are set to become available for sale on Monday, Oct. 26, under the company's unusual staggered lockup schedule, according to an analysis published by The Motley Fool.

The unlock is the latest in a series of scheduled events that allow insiders to sell shares earlier than is typical for newly public companies, a structure some analysts warn could weigh on the stock and on retail investors who bought into the company after its debut.

SpaceX shares, which trade on the Nasdaq under the ticker SPCX, fell about 2.8% in recent trading amid a broader decline in technology stocks.

A record-breaking IPO

SpaceX, Elon Musk's space exploration and satellite company, went public on June 12 in a debut that rewrote Wall Street's record books.

The company raised $85.7 billion in its initial public offering, including the underwriters' overallotment, nearly three times the previous record set by Saudi Aramco. Its initial valuation of $1.77 trillion was also the largest in history.

SpaceX has pitched itself as an artificial intelligence and space infrastructure giant, claiming a total addressable market of $28.5 trillion, much of it tied to its AI ambitions. That vision, combined with Musk's track record in building Tesla into a trillion-dollar company, has generated strong enthusiasm among retail investors.

An unconventional lockup

When private companies go public, they typically impose a lockup period of about 180 days during which insiders, including executives, board members and major shareholders, cannot sell their shares. The restriction is designed to prevent insiders from cashing out during the initial wave of investor excitement after a listing.

SpaceX departed from that convention. In its prospectus, the company laid out a staggered and accelerated schedule that allows certain insiders to sell portions of their holdings well before the usual 180-day mark.

Under the schedule, about 911.5 million shares became eligible for sale by insiders on the second trading day after SpaceX released its first quarterly report as a public company. The same number of shares will become eligible two trading days after its next quarterly report.

In addition, the plan includes time-based unlocks on the 70th, 90th, 105th, 120th, 135th and 180th calendar days after the IPO. Because the 135th day falls on a weekend, the next release of about 319 million shares will take place on Monday, Oct. 26.

Musk's shares remain locked

Musk, who holds a majority of SpaceX's outstanding shares, is not eligible to sell any of his stock for 366 calendar days after the company's debut, meaning his shares remain locked up until June 2027.

That restriction provides some reassurance to investors that the company's founder and largest shareholder will not be selling in the near term.

Why unlocks matter

Lockup expirations can put pressure on a stock's price because they increase the number of shares available for trading. If insiders choose to sell, the added supply can push prices lower, particularly when a stock has risen sharply or trades at a high valuation.

Not all insiders sell when lockups expire, and the impact can vary widely depending on market conditions and investor demand.

The Motley Fool's analysis argued that SpaceX's accelerated unlock schedule could leave retail investors, who often bought shares amid the post-IPO excitement, exposed to selling pressure from insiders who acquired their stakes at much lower prices before the company went public.

Valuation concerns

SpaceX's enormous valuation has drawn scrutiny from some analysts, who question whether the company's revenue and profit can justify a market value in the trillions of dollars.

The company's core businesses include rocket launches for government and commercial customers and its Starlink satellite internet service, which has grown rapidly. SpaceX is also pursuing AI-related ventures and ambitious long-term projects, including plans for missions to Mars.

Supporters argue the company's dominant position in space launch and satellite communications, along with its growth potential in AI and space infrastructure, justifies its premium valuation.

Broader market pressure

The upcoming unlock comes at a challenging time for technology stocks. Shares fell sharply this week after U.S. inflation data came in hotter than expected, raising the possibility of further interest rate increases, while doubts about the AI investment boom weighed on chip and AI-related companies.

Nasdaq futures were down more than 1% on Thursday morning, signaling further pressure on technology shares.

Investors will be watching trading volumes and the stock's performance around the Oct. 26 unlock for signs of insider selling.

Further share releases are scheduled under the company's lockup plan, including the 180-day mark in December and the unlock tied to SpaceX's next quarterly earnings report, which could add significant additional supply to the market in the months ahead.