SpaceX (SPCX) stock whipsawed through a volatile week, swinging from an all-time low to a sharp rebound and closing at a new low, as investors braced for the newly public company’s first earnings report and a major share unlock.
SpaceX closed down 3.4% on Friday to finish at $108.37. During an up-and-down week that swung from gains to losses, the stock ended on a down note, falling about 5.8% for the week.
SpaceX stock has shed approximately 30% from its $150 market debut last month and remains down roughly 50% from its all-time high of $225.64.
The swings come ahead of SpaceX’s second quarter earnings, due Aug. 4. But a bigger overhang is a lockup expiration on Aug. 6 that will free as much as 20% of shares for sale under the company’s lockup plan. Many investors worry that the added supply will keep the stock under pressure.
Read more: SpaceX stock keeps sliding. What to do if you own shares.
In addition, CEO Elon Musk is reportedly still pushing for a merger between SpaceX and Tesla (TSLA). The Wall Street Journal reported on Friday that executives are trying to decide how to dispose of Tesla’s China business in the event of a merger. SpaceX’s government and national defense contracts could be a concern for the Chinese government.
“A potential merger between SpaceX and Tesla would likely trigger intense scrutiny from Beijing, given that a major U.S. defense contractor would control Tesla’s factories in China and the factories’ know-how and supply chain could be repurposed for the U.S. military,” the Journal reported sources saying.
Another concern for China would be SpaceX — and potentially the US government — getting data from China’s 2 million Tesla owners, sources told the Journal.
Merger talk aside, when SpaceX reports results next week, investors will have a close eye on SpaceX’s capital expenditures, S&P Global Visible Alpha analyst Melissa Otto wrote.
“SpaceX’s capex numbers are expected to increase from $48.7 billion this year to $118.4 billion in FY 2028. … In addition, SpaceX’s overall debt is also projected to grow over 5x from $41.7 billion this year to over $218.0 billion in FY 2028,” Otto noted.
The concern with SpaceX’s large capital requirements — like those of the large AI frontier startups and even Oracle (ORCL), Alphabet (GOOGL), and Meta (META) — is that its AI infrastructure investments will not generate a healthy return given the level of cash required.
Pras Subramanian is Lead Transportation Reporter for Yahoo Finance. You can follow him on X and on Instagram.
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