Space Exploration Technologies Corp (NASDAQ:SPCX) shares remained below their IPO price on Thursday after closing at $131 as economist Peter Schiff warned that upcoming share lockup expirations could further pressure the stock by significantly expanding its tradable float.
Schiff Flags Lockup Expiration Risk
Schiff said SpaceX had fallen as low as $126.25 in extended trading, adding that the stock’s recent decline came before the company’s insider lockup expirations and that its tradable float could expand eightfold by the end of the year as restrictions on insider sales are lifted.
The stock has retreated nearly 44% from its record high of $225.64, with Schiff saying that the stock was “coming back down to earth.”
“Houston, we have a problem!” Schiff said, adding that the expected increase in shares available for trading could create additional pressure on the stock.
Lockup schedule
Insiders will be allowed to sell up to 20% of their holdings beginning on the second full trading day after the company reports its Q2 results, which analysts expect in early August, though the company has not announced an earnings date.
A separate 10% tranche will unlock if the stock closes at least 30% above its $135 IPO price, or above $175.50, in at least five of 10 trading sessions after the earnings.
The standard 180-day lockup is expected to expire around mid-December, while CEO Elon Musk and other major shareholders remain subject to restrictions until around June 2027 unless earlier stock price-based release conditions are met.
Analysts Warn on Float Expansion
Veteran market strategist George Noble, a former Peter Lynch protégé, earlier this week said the company’s lockup schedule, not its valuation, is the biggest near-term risk for the stock.
Noble said fewer than 5% of SpaceX’s shares were freely tradable at its IPO, helping drive the stock’s early rally, but estimated that upcoming insider unlocks could increase the tradable float by roughly 900% by early September.
The Future Fund‘s Gary Black warned that upcoming share unlocks could pressure SpaceX shares, saying the company’s $1.8 trillion valuation left little room for upside and that he would not get excited about the stock until it fell below $100.
SpaceX also aborted its Starship test flight late Thursday after some of the engines failed to start, with Musk saying on X that the company would likely try again in a few days.
Price Action: SPCX closed 3.08% at $131.11 on Thursday and fell further 3.08% in extended trading.
Benzinga edge rankings indicate that SPCX has a negative price trend across the short, medium and long term.
Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
Photo Courtesy: JRdes on Shutterstock.com
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