SpaceX stock fell below its $135 initial public offering price on August 20 as a second tranche of insider shares became available for trading, marking a shift in market sentiment after the company’s June debut. The stock dropped approximately 5 to 6 percent to around $132–$132.60 as roughly 319 million shares unlocked, erasing the gains that early public investors had enjoyed over the previous two weeks.
The unlock represents the 70th day following SpaceX’s IPO, part of a carefully choreographed staggered lockup schedule designed to release shares in increments rather than all at once. About 7 percent of SpaceX shares held by insiders and early investors became eligible to trade on August 20, according to the company’s IPO prospectus.
The August 20 decline contrasts sharply with the market’s reaction to the first lockup expiration on August 6, when 911.5 million shares unlocked. Despite that massive release—more than double the size of the August 20 tranche—SpaceX stock actually rose 2.5 percent, defying the typical pattern of selling pressure that follows lockup expirations. That early resilience had suggested investor appetite remained strong enough to absorb additional supply without pushing the stock below its IPO price.
The second unlock’s different outcome reflects broader market dynamics. When the first lockup expired on August 6, it came just days after the company reported strong second-quarter earnings, with revenue rising 92 percent year-over-year to $7.81 billion. However, the earnings presentation also highlighted heavy spending on artificial intelligence infrastructure, which prompted some investor concerns about the company’s path to profitability. By mid-August, that selling pressure had accumulated, making the market less receptive to the additional share supply from the August 20 unlock.
SpaceX has structured its lockup period to release shares in nine separate tranches over the next 10 months, with staggered expirations scheduled for August, September, October, and December 2026, plus additional releases into mid-2027. In total, the staggered schedule is expected to free up approximately 12.9 billion shares by mid-2027, though some tranches include conditional triggers tied to the stock price trading at least 30 percent above the IPO price. Elon Musk’s 6.4 billion shares remain locked until June 12, 2027.
Despite the August 20 decline, Wall Street remains divided on the stock’s direction. Morgan Stanley analyst Adam Jonas said he expects SpaceX to reach a new all-time high over the next 12 months, according to reporting from Alpha Spread. However, Morgan Stanley has set a $300 price target for the stock, suggesting significant upside from current levels. In contrast, DZ Bank initiated coverage of SpaceX on August 21 with a Sell rating and a $100 price target, citing concerns about the company’s valuation and capital intensity.
The lockup expiration schedule creates a test for SpaceX’s ability to maintain investor enthusiasm as supply increases. The first unlock proved that strong operational performance—the earnings beat and revenue growth—can offset the typical negative impact of insider selling. However, the August 20 decline suggests that market sentiment can shift quickly if concerns about profitability or capital spending outweigh confidence in the company’s long-term prospects. With further tranches scheduled for September and October, and a much larger release expected in December when the 180-day standard lockup expires, SpaceX shareholders may face continued volatility as the company navigates both operational execution and share supply dynamics.
Sources
- Alpha Spread — SpaceX stock fell 4.94 percent to $132.60 on August 20 as 319 million shares unlocked; Morgan Stanley analyst Adam Jonas expects a new all-time high within 12 months; DZ Bank initiated Sell coverage with $100 price target on August 21.
- Yahoo Finance / 24/7 Wall Street — SpaceX stock dropped 6 percent to approximately $131.86 on August 20, slipping below the $135 IPO price; first lockup expiration on August 6 released 911.5 million shares and stock rose 2.5 percent.
- CNBC — First lockup period expired on August 6, 2026, freeing 911.5 million shares for early investors; August 20 unlock made another 319 million shares eligible to trade.
- Reuters — SpaceX’s staggered lockup schedule frees additional 12.9 billion shares by mid-2027; lockup structure is unusual because banks staggered the releases rather than using a single expiration date.
- The New York Times — SpaceX has staggered its lockup period so early employees and investors can sell tranches over the next 10 months; after first lockup expires, SpaceX’s public float will increase to more than 12 percent.
- Business Insider — On August 6, 20 percent of eligible shares became eligible for sale; on August 20, an additional 7 percent became eligible; further tranches scheduled for September and October 2026.
