"SpaceX had a successful IPO, and the stock already climbed as high as $225 a share. But there are several key dates ahead that investors need to watch closely, whether they already own the stock or are considering buying it.
One near-term positive catalyst is July 6, when SpaceX is set to join the Nasdaq-100. That matters because index funds and ETFs that track the Nasdaq-100 will be forced buyers of the stock. Estimates suggest that demand tied to the index addition could total roughly $7 billion to $10 billion. With SpaceX’s average daily dollar trading volume around $25 billion, that kind of forced buying could provide a meaningful boost to the stock.
The bigger risk, however, is the lockup schedule. The first lockup expiration is expected in late July or early August, after first-quarter earnings. That event alone could put real pressure on the stock, with an estimated 20% to 30% of shares becoming eligible for sale. After that, there are several additional release dates- August 20, September 9, October 9, and October 24- with another 7% of shares coming off lockup on each date, for a total of 28%.
Then, after the second-quarter earnings report around October or November, another 28% of shares are expected to be released. Finally, on December 8, any shares still remaining under lockup will become eligible for sale.
In total, it is estimated that roughly 13 billion shares are currently locked up. For perspective, only about 640 million shares were available in the IPO. If even 25% of those locked-up shares eventually come to market, that would mean more than 3.2 billion additional shares becoming available for sale. That is a massive increase in supply, and it creates a real possibility that the stock could trade below its IPO price.
It is also worth noting that September put options on SpaceX have seen heavy activity. Put buying often signals that traders are positioning for downside or looking to hedge against a decline in the stock.
And investors should not dismiss the risk of lockup expirations. These events can put significant pressure on newly public stocks. Rivian, for example, fell 21% when its lockup period ended.
The other major issue is valuation versus expectations. Elon Musk has said he believes SpaceX can generate $1 trillion in revenue by 2030. That is an extraordinary target, and investors should remember that Musk has made a number of bold projections over the years that never materialized. That does not mean SpaceX cannot continue to grow, but it does mean investors should separate the company’s real operating potential from the hype that often surrounds Musk’s forecasts.
The bottom line: SpaceX may get a short-term boost from joining the Nasdaq-100, but the much bigger story over the next several months is the wave of lockup expirations. That flood of new supply could create serious volatility and potentially heavy downside pressure, especially if insiders decide to cash out while the stock is still trading at a premium valuation."
-Brent Wilsey, Wilsey Asset Management