SpaceX overhang threatens AI IPO launch window

On August 6, about 20% of SpaceX's eligible locked shares become available to sell. An extra 10% could become unrestricted if the stock trades 30% or more above the rocket-maker’s initial public offering price during five of the 10 consecutive trading days after its first earnings release.

OpenAI and Anthropic will be watching the countdown. The leading, still-private AI labs, last valued at $852 billion and $965 billion respectively, are very different businesses from SpaceX, but their public ambitions rely on tapping the same crowd of buyers. Institutional investors with a long-term holding strategy ended up buying about 70% of shares offered in Musk’s company, but retail investors took 20%, while hedge funds took 10%, Reuters reported at the time.

Those marginal buyers are extremely important. In the week of SpaceX's listing, Bank of America data showed that hedge funds were the only major client group adding U.S. equity exposure, buying a net $1.8 billion, while institutional clients sold $2.7 billion. Retail trading flow, meanwhile, is breaking records previously set during the pandemic, Citadel Securities says, accounting for a big chunk of the market.