SpaceX (NASDAQ:SPCX) is set to face another major supply test on Thursday as 319 million additional shares become eligible for trading, following the release of 912 million shares on August 6. Despite concerns of heavy selling, the stock has defied expectations, climbing roughly 35% since the first lockup expired.
The upcoming unlock is not the only catalyst on the horizon. The Nasdaq-100's quarterly rebalance, scheduled to take effect before trading begins on September 21, could trigger fresh demand from passive funds tracking the index. This has investors looking beyond the immediate supply overhang to a potential price boost.
Index inclusion and passive inflows
SpaceX joined the Nasdaq-100 on July 7, and JPMorgan estimated that inclusion could attract approximately $4.3 billion in passive inflows from funds that track the benchmark. The rapid integration into the index was seen as a sign of strong demand, according to Morningstar strategist Michael Field, who told Reuters that "clearly, there's a lot of demand; that's why they fast-tracked the integration into the index." However, Field also noted that Morningstar considers the shares overvalued.
The key question now is whether SpaceX's growing public float will increase its weight in the index. Investor Tangerine Tan Capital calculates that SpaceX currently holds about a 1.16% weight in the Nasdaq-100, well below the 4% to 5% allocation that its market value could justify without the float constraint. As more insider shares become tradable, index funds may increase their holdings during future rebalances.
"I am expecting a price increase around the time of the rebalancing," Tangerine Tan Capital wrote.
August 20 unlock: a test of buyer appetite
Before the September catalyst, the market must first absorb the additional 319 million shares. Eligibility does not guarantee that holders will sell, but it creates another potential source of supply. Research analyst Ed Elson expects "a lot of selling pressure" as early backers look to monetize years of gains.
The August 6 unlock offered an encouraging precedent. More than 900 million shares became eligible, yet SpaceX rose 6.1% to $114.92. Elson suggested that short sellers closing positions may have helped absorb the new supply. Morgan Stanley analyst Adam Jonas was also bullish around that event, viewing the unlock as a buying opportunity and projecting a potential price of $300 by mid-2027, as reported by the Associated Press.
Valuation concerns persist
Even if the rebalance triggers additional passive buying, it does not automatically make SpaceX fundamentally cheap. The stock has been highly volatile since its $135 IPO, reaching a high of $225.64 before falling below the offer price and subsequently recovering.
NYU professor and investor Scott Galloway told Business Insider this week that SpaceX remains "crazy overvalued," arguing that its limited initial public float and rapid Nasdaq-100 inclusion have created unusually strong demand. This sentiment echoes broader concerns about the sustainability of the rally.
As the market navigates these dynamics, investors will be watching both the immediate supply test and the potential for index-driven inflows. The outcome could set the tone for SpaceX's performance in the coming weeks. For more on related market moves, see our coverage of SpaceX's second lockup expiry and Nasdaq futures sliding on rising yields.
This article is for informational purposes only and does not constitute financial advice.
