SpaceX selloff an ominous sign as lockup expiry looms

"We think at this level, it's relatively safe to at least be involved from a trading perspective," said Jay Hatfield, CEO of Infrastructure Capital Advisors in New York. "We won't overweight it because they do have the lockup coming." The stock is valued at **49 times expected revenue** following the selloff, still one of Wall Street's priciest stocks by that measure. By comparison, Tesla **TSLA.O** -- another Musk-backed investor favorite -- recently traded at a revenue multiple of **15**. Bullish analysts and investors say SpaceX warrants a high premium because of its profitable Starlink internet service, its government rocket launch business, and Musk's track record commanding investor loyalty, even though it reported a net loss of nearly **$5 billion** last year. Of the **32** analysts with ratings on the stock, **27** recommend buying, while just **one** recommends selling and **four** are neutral, according to LSEG data. A Reuters analysis of **50** high-profile U.S. IPOs since 2010 showed that companies whose shares fell below their IPO price in the first two months after their market debuts have gone on to underperform those that didn't, even though most still posted gains. **Twenty-one** of the 50 companies fell below their IPO price in their first two months; those stocks have a median increase of **61%** since their debuts, compared with a median gain of **112%** for the remaining 29. A series of restrictions on additional stock sales by insiders, employees and early investors will lift over the next several months. In the first of those releases, rank-and-file employees and some early investors will be free to sell **911.5 million shares** on the second trading day after the company's debut quarterly report. The company has not announced the date of its first earnings report, which analysts expect in early August. Those eligible shares are currently worth about **$123 billion**, eclipsing the **$86 billion** worth of shares currently available for trading on the Nasdaq. An additional **455.8 million shares** will be eligible for sale if SpaceX's stock price stays above **$175.50** for at least five of the 10 consecutive trading days through the date of the company's upcoming quarterly report. All in all, restrictions lifted through December 8 will increase SpaceX's float of potentially tradeable shares to **40%** of the company, with the remaining **60%**, including Musk's stake, locked up until mid-2027. The dip in SpaceX's shares below its [blockbuster IPO](https://www.reuters.com/graphics/SPACEX-IPO/byprdokrkpe/) price of **$135 a share** is an ominous sign for Elon Musk's internet and rocket company as it faces more potential volatility in early August, when the number of shares available for trading on the Nasdaq stands to increase significantly. The company's stock on Wednesday dipped as low as **$132.15** before closing at **$135.27**. It has now tumbled **33%** from its record close in the immediate days after the public sale raised a record **$75 billion** on June 11. Even after that steep decline, it remains one of Wall Street's most valuable companies with a market capitalization of roughly **$1.8 trillion**. While SpaceX's IPO was the largest in U.S. history, it made less than **5%** of its shares available for stock market trading, making investors fight for a scarce number of shares that helped value the company at **$2.1 trillion** after its first day on the Nasdaq. So-called "lockup" restrictions on insiders will lift in coming months, potentially flooding the market with additional shares.

SpaceX selloff an ominous sign as lockup expiry looms

Analysts remain bullish despite the selloff

Lockups start to lift over the next several months

SpaceX shares fall below IPO price as lockup expiry nears

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