SpaceX Prepares for Massive Share Dump as Analysts Remain Bullish

Nearly a billion shares of SpaceX will unlock on Thursday, totaling around $100 billion at current prices. This is more of a supply shock than the entire IPO itself, according to analysts.

Gil Luria, head of technology research at D.A. Davidson, said that early employees might want to diversify their wealth after spending decades with most of it tied up in a single stock. The transfer from private-company insiders to public-market investors is the 'natural course of business', but it puts pressure on the share price as fresh supply enters the market.

SpaceX avoided the worst of this moment by quietly lining up its buyers before the lockup clock even started running. Index providers added the stock within 25 days of listing, forcing passive funds to buy in and generating substantial demand from index inclusion. Without it, Luria said, SpaceX would face the lockup expiration with 'the supply from lockups' but none of the demand generated by index funds or arbitrage traders buying ahead of them.

Analysts across Wall Street doubled down on their support for SpaceX despite its recent struggles, with JPMorgan even lifting its price target from $220 to $240. As Luria put it, 'You never bet against Elon', a 'truism in the investing community' after years in which investors lost enormous sums betting against Tesla.