SpaceX (SPCX) shares pared early losses on Tuesday as investors braced for another wave of share supply hitting the market. The stock fell as much as 4% to $140.55 in early trading, following Monday's 4.5% rally, before recovering to trade about 1% lower.
The latest decline comes ahead of the August 20 unlock of approximately 319 million shares held by early investors and insiders. This is the second major tranche of shares to become tradable since the company's initial public offering in June, when SpaceX sold about 556 million new shares at $135 each, raising roughly $75 billion.
Unlike a traditional single lockup expiry, SpaceX has adopted a staggered schedule. About 912 million shares became available on August 6, and the upcoming unlock adds to the supply. More than 700 million shares are expected to unlock in September, followed by over 650 million in October. By year-end, nearly 4.9 billion shares—about 70% of the shares not held by Elon Musk—will have entered the public float.
The growing float has been a key factor in SpaceX's volatile trading since its debut. The stock initially climbed to $225 before tumbling more than 50% to $107 in July, as concerns about early investor profit-taking weighed on sentiment. It has since recovered, buoyed by a strong second-quarter earnings report on August 4 and the first major unlock on August 6.
Investor and marketing professor Scott Galloway, speaking on a podcast released Monday, argued that SpaceX remains significantly overvalued despite its recent rebound. He estimated the stock is worth between $10 and $30, far below Monday's closing price of $146. "It's still crazy overvalued," Galloway said. "I think this is a $10 to $30 stock."
Galloway attributed the elevated valuation partly to favorable market mechanics. Only about 4% to 5% of SpaceX's shares were initially available for public trading, limiting supply. Additionally, the stock's inclusion in the Nasdaq-100 index has driven demand from index-tracking funds. He acknowledged Musk's engineering prowess but questioned the financial engineering behind the valuation.
Despite Galloway's bearish view, Wall Street remains optimistic. The average analyst price target for SpaceX is $226, according to FactSet, well above the current price. Analysts also project revenue to grow from roughly $44 billion in 2026 to about $99 billion by 2027, reflecting expectations of continued expansion in SpaceX's launch and satellite businesses.
Investors will be watching how the market absorbs the latest share unlock. The second lockup expiry could test demand, especially with more supply on the horizon. Meanwhile, broader market dynamics, including mixed signals from equities and commodities, may also influence sentiment. For context, Musk's fortune has swelled as SpaceX shares have rallied, but the upcoming unlocks could temper that momentum.
As the lockup schedule unfolds, the balance between supply and demand will likely remain a central theme for SpaceX stock. The company's fundamentals, including its earnings beat and revenue growth projections, provide a counterweight to valuation concerns. For now, the market is weighing these factors as the next batch of shares becomes tradable.
This article is for informational purposes only and does not constitute financial advice.
