SpaceX (SPCX) shares continued their downward slide on Wednesday, falling roughly 3% as investors digested a significant competitive milestone from Chinese rocket maker LandSpace and prepared for another large batch of shares to become eligible for trading. The stock had already closed about 2% lower on Tuesday, extending a pattern of volatility since the company's June IPO.
LandSpace's Zhuque-3 recovery
LandSpace successfully recovered the first stage of its Zhuque-3 rocket, marking the first ground landing of an orbital-class booster by a private Chinese company. The 216-foot rocket can carry about 14.2 metric tons to low Earth orbit, compared with roughly 22.8 metric tons for SpaceX's Falcon 9. While SpaceX retains a substantial experience edge—having completed hundreds of booster landings since 2015—LandSpace's achievement signals that competitors are closing the gap in reusable rocket technology, a key pillar of SpaceX's commercial launch dominance.
Share unlock adds supply pressure
Adding to the bearish sentiment, approximately 319 million SpaceX shares held by early investors and employees are scheduled to become eligible for sale on August 20. This is part of a laddered lockup structure that has been releasing shares in tranches since the IPO. About 912 million shares became available on August 6, and more than 700 million are expected to unlock in September, followed by over 650 million in October. By year-end, roughly 4.9 billion shares will have entered the tradable float.
The expanding supply has been a major overhang on the stock, which remains above its $135 IPO price but well below its post-IPO peak of $225.64. Shares closed their first trading day at $161.11, about 19% above the IPO price, before retreating ahead of the first quarterly earnings report. The stock has since recovered somewhat as investors refocused on growth across SpaceX's core businesses, but the persistent unlock schedule has kept a lid on gains.
Analyst outlook remains bullish
Despite the near-term headwinds, UBS reiterated a Buy rating on SpaceX with a $210 price target earlier this week. Analyst John Hodulik cited the company's position as a major cloud provider and frontier model, and expects demand for tokens to drive trading. UBS models 3 million U.S. Starlink subscribers currently, rising to 6 million by the end of 2027 and 20 million by 2031. The firm believes the growth trajectory can absorb volatility from lockups.
Investors are also watching the broader market context, including potential index rebalance effects and the impact of the second lockup expiry. Meanwhile, Musk's fortune has swelled as SpaceX's valuation has climbed, though the stock's recent dip has trimmed some of those gains.
The combination of a competitive milestone and ongoing supply pressure suggests that SpaceX shares may remain volatile in the near term. However, with a strong backlog of launch contracts and a growing Starlink subscriber base, the long-term growth narrative remains intact for many investors.
This article is for informational purposes only and does not constitute financial advice.
