There’s much work to be done before reclaiming the high of $225.64, but for the week ending Monday, Aug. 10, shares of Elon Musk’s Space Exploration Technologies (NASDAQ: SPCX) are higher by 21.1%.
Alone, that’s impressive, but the stock’s resurgence is all the more noteworthy when considering it coincided with the expiration of the first lockup period. Aug. 6 was the first day since the June initial public offering (IPO) on which 911.5 million shares held by SpaceX insiders, including employees, could ring the register.
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Some likely did engage in a bit of selling. After all, the SpaceX IPO minted 4,000 new millionaires among staffers, and by the looks of some Los Angeles-area markets near SpaceX offices, some of those employees are planning to buy tony real estate. Yet, even with the lockup, the stock is climbing. So much so that on Aug. 10, it closed above the $135 IPO price for the first time in almost a month. How long the rally holds remains to be seen.
Musk unscathed, sort of…
No one is going to cry for SpaceX founder and CEO Elon Musk. Immediately following the IPO, he was briefly the first person in history with a net worth of at least $1 trillion. That figure was “just” $853.3 billion as of Aug. 10.
So Musk is no longer the lone member of the $1 trillion club, the result of SpaceX trading lower since the IPO. Still, the stock’s post-lockup price action suggests Musk’s formidable wallet emerged relatively unscathed. Here’s where things get interesting. The lockup period Musk and all SpaceX shareholders endured last week isn’t the last.
Another 28% of the float unlocks on the second full trading day following the company’s third-quarter earnings report. As of yet, that update isn’t scheduled, but it’s likely to arrive in late October or early November. After that, all restrictions on employee selling end in mid-December, so it could be an eventful fourth quarter for SpaceX.
Arguably somewhat lost in the commotion surrounding the stock’s post-IPO weakness is that the drop prevented an unlocking of another 10% of the float, which could have occurred had the shares traded at least 30% above the IPO price of $135 for at least 5 of the 10 trading days ending on the earnings release date. That didn’t happen.
