Will the upcoming massive insider lock-up expiration push the struggling SpaceX IPO into an even deeper downward spiral?
How Did the SpaceX IPO Impact Wall Street?
The launch of the SpaceX IPO sent shockwaves through the technology and defense sectors, drawing immense retail interest and shifting capital away from older plays. Strategic advisor Hatem Diab noted that for investors wanting to stay within the “Elon sphere,” Tesla has lost some of its luster compared to owning SpaceX directly. However, the post-listing performance has been brutal. The stock has shed over 40% of its value from its intraday highs, wiping out more than $1 trillion in paper wealth.
This correction has also impacted major institutional backers. Alphabet recently disclosed in its quarterly filing that it holds a 6% stake in SpaceX, valued at approximately $94.1 billion. While these unrealized gains heavily padded Alphabet’s second-quarter earnings, the subsequent slide in SpaceX shares, combined with Alphabet’s own rising capital expenditures, has pressured both stocks. Despite the selloff, Gregory Miller, managing director at Citizens JMP Securities, remains constructive, suggesting that the broader market anxiety surrounding the AI and space sectors is overdone.
Why is SpaceX Facing a Valuation Reality Check?
At its current valuation of approximately $1.5 trillion, SpaceX trades at a steep premium of roughly 40 times its estimated 2026 revenue of $39.1 billion. Unlike chipmaker NVIDIA, which boasts surging profitability and a more reasonable valuation, SpaceX continues to burn through cash. The company recorded an operating loss of $2.5 billion in 2025, driven by a staggering $21 billion in capital expenditures to fund its Starlink satellite network and the ambitious Starship rocket program.
Furthermore, Elon Musk’s pitch of building orbital AI data centers has met with skepticism. While SpaceX acquired xAI earlier this year to position itself as a vertically integrated AI company, critics like geopolitical analyst Peter Zeihan have called orbital compute highly impractical due to extreme cooling and shielding costs. For now, terrestrial contracts remain the primary driver, such as Anthropic’s agreement to pay SpaceX $1.25 billion monthly for land-based data center capacity.
What Do Insider Lock-Up Expirations Mean?
The next major hurdle for the stock lies in its share structure. During the SpaceX IPO, only a tiny 4.9% public float of the company’s 13.2 billion outstanding shares was made available. This restricted supply amplified the early price spike, but a massive wave of supply is about to hit the market.
SpaceX is scheduled to release its first quarterly earnings report on August 4. Just two days later, standard lock-up agreements will partially expire, releasing roughly 911 million pre-IPO shares and more than doubling the public float to 12%. As early investors and employees look to diversify, this impending selling pressure could keep the stock highly volatile through the end of the year.
Related Coverage:
For a deeper look into the financial health of the aerospace pioneer, read our analysis on the SpaceX Earnings: Stock Drops -5.9% as Staggering AI Losses Mount, which examines how heavy capital spending is impacting the company’s bottom line. Additionally, to understand broader market movements and industrial trends, check out how Norfolk Southern Earnings Surge 5.3% After Record Q2 Revenue amid ongoing regulatory discussions.
Ultimately, the SpaceX IPO has transitioned from a speculative frenzy into a long-term execution game. While near-term lock-up expirations and heavy infrastructure spending will likely pressure the stock, the company’s unmatched dominance in satellite broadband and space launch capabilities remains undisputed. For patient investors, this post-IPO correction may eventually offer an attractive entry point into the future of the space economy.
