SpaceX insiders became eligible on Aug. 6 to start selling up to $99 billion in stock, the first of several staggered unlocks running through mid-December. The event follows SpaceX's first earnings report as a public company, after which the stock fell 13.6% to $108.27. A float of less than 5% of shares outstanding could amplify the impact of insider selling in the weeks ahead.
Insiders at SpaceX got their first chance on Aug. 6 to sell into a stock that has already lost more than half its value from its peak, with up to $99 billion of shares now eligible to hit the market. The unlock is the first crack in a lockup schedule that has kept early investors out of the market since the company's record IPO.
A staggered unlock through mid-December
SpaceX built an accelerated, staggered unlock schedule instead of the standard 180-day lockup most newly public companies use. The first milestone falls on the second trading day after SpaceX's first quarterly report as a public company, which landed on Aug. 4 — making Aug. 6 the trigger date. This stage alone lets insiders sell 20% of early release-eligible shares, or roughly 911.5 million shares, with new milestones arriving every two to three weeks after that.
That pressure lands on a stock that has already plunged 52% below its all-time intraday high as of the end of July. It's a sharp reversal from the $85.7 billion IPO that briefly pushed the company to a nearly $3 trillion valuation in June.
Earnings knock the stock lower first
Before the unlock even opened, the earnings report did damage of its own. Shares fell 13.6% to $108.27, well below the $135 IPO price. Quarterly revenue nearly doubled to $7.8 billion year over year. Spending, meanwhile, ballooned to $18.3 billion, more than six times what it was a year earlier.
The company posted a net loss of $143 million for the quarter and $2 billion for the first six months of the year.
A thin float raises the stakes
That thin float — the pool of shares actually available to trade — is why the unlock matters so much. SpaceX sold roughly 555.6 million shares in its IPO, less than 5% of its outstanding shares, compared with the 10% to 25% that companies typically sell going public.
Passive funds have since absorbed a sizable portion of that limited float following SpaceX's fast-track entry into the Nasdaq-100, Russell 1000 and Russell 3000, arguably giving the share price an artificial boost.
Early employees are already cashing out
Some early employees aren't waiting to see how it plays out. Andre Lavoie, an engineer who joined SpaceX in 2009 and was paid partly in stock, now holds 200,000 shares worth about $23 million.
According to Lavoie: "Every chance I get going forward, I'll sell a little bit more." He isn't alone — an estimated 4,400 people became new millionaires from the listing.
Sources: The Motley Fool, BBC News
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