SpaceX stock faces 1.37 billion share unlock in August

SpaceX stock has slipped below its $135 IPO price as valuation worries, short selling and a coming share unlock pressure the debut.

The company’s shares have traded under their offer price for most of the past two sessions after several weeks of weakness, according to market figures in the supplied material. The drop has revived doubts that surrounded the IPO, including criticism of the opening valuation, the long runway for some business plans and the size of the retail allocation.

$1 trillion valuation hit

The largest figure in the selloff is the loss in market value since the early post-IPO peak. SpaceX closed its third trading day with a valuation of $2.64 trillion, then slid to $1.63 trillion by Friday’s close, erasing about $1 trillion in equity value.

That move matters because the first weeks after a major listing often set the tone for liquidity, institutional ownership and employee confidence. For SpaceX, the decline has challenged the idea that investors would quickly absorb a premium valuation for a company still tied to costly launch execution and future growth assumptions.

Operational news added to the pressure. The company aborted a launch last Thursday after an engine failure, and the stock fell further into the end of the week, the supplied account said.

Short sellers find early gains

Bearish investors have had a profitable start. S3 Partners estimated that short sellers had accumulated about $5 billion in paper gains since the IPO, with roughly 30% of the public float sold short.

The short position has also expanded quickly. S3 Partners said short interest was up nearly fivefold over the past month, a sign that the early decline has encouraged more investors to bet against the shares rather than cover positions.

Heavy short interest can cut both ways. If the price keeps falling, it can reinforce selling pressure; if shares recover sharply, short covering can add forced buying and make the rebound faster than fundamentals alone would imply.

August unlock becomes pressure point

The next technical test is the lockup schedule. Company filings cited in the supplied material show that 1.37 billion shares will become eligible for sale two full trading days after second-quarter earnings, which are due after the market close on Aug. 17.

That amount equals 20% of the early-release-eligible shares. Even a partial sale by eligible holders could widen supply in the public market, especially if it arrives while confidence in the IPO valuation is still fragile.

The bullish case has not disappeared. An analyst tally included in the material showed 30 buy ratings, six holds and one sell, while the consensus 12-month price target was $235.34, about 90% above Friday’s close.

For global markets, the SpaceX trade is a test of appetite for expensive growth companies at a time when investors are separating durable cash-generation stories from long-dated promises. If the share unlock passes with limited selling and earnings support the valuation, SpaceX could stabilize and the space sector may regain access to cheaper equity capital.

If the unlock brings heavy supply or another launch setback damages confidence, the mechanism runs the other way: lower shares weaken sentiment toward SpaceX, pressure comparable space and defense-technology names, and reduce tolerance for richly valued IPOs. The open questions are specific: how many unlocked shares are sold, whether launch reliability concerns fade, and whether public-market investors accept the company’s valuation before its longer-term projects mature.