SpaceX shares rebound as lock-up expiration fails to trigger selloff

SpaceX shares rebounded Friday as a large block of previously restricted stock became eligible for trading for the first time since the company's initial public offering, defying fears of a wave of selling. Early investors largely chose to hold rather than sell, limiting actual selling pressure.

According to CNN and CNBC, the lock-up period on approximately 911.5 million shares held by SpaceX employees and early investors expired Thursday, freeing those shares for open-market trading.

The newly tradable volume is about 270 million shares more than the 639 million shares that entered the market at the June IPO. With the float expanding sharply from the restricted levels seen at listing, the market has been closely watching whether existing holders would move to sell.

It is standard practice for companies to impose a lock-up period after listing, restricting existing shareholders from selling for a set time. SpaceX plans to lift its lock-up restrictions in stages over the coming months. According to Reuters, tradable shares will expand to roughly 40 percent of the total by Dec. 8, and by mid-2027 the remaining shares — including Elon Musk's stake — will also become freely tradable.

Investors had been watching the unlock schedule closely, given that a surge in available shares could prompt profit-taking by existing holders and weigh on the stock in the near term.

SpaceX made its market debut in what was the largest IPO on record and posted steep gains in the early days of trading. The share price at one point surged as high as $225.64 intraday, pushing the company's valuation above those of Microsoft and Amazon. At that point, there was talk that Musk could become the world's first "trillionaire."

But profit-taking following the post-listing surge, combined with growing concerns about the company's valuation, erased most of those gains. The share price fell below the IPO price of $135, and on Thursday it plunged 14 percent to close at $108.27 — a record closing low. That decline had fueled concern that the lock-up expiration could trigger further losses.

The market's actual reaction, however, defied those expectations. SpaceX shares closed at $114.92 on Friday, up 9 percent from the previous session, recovering a portion of Thursday's steep decline.

Early investors also appear inclined to wait and see whether the rebound holds rather than sell immediately. According to Business Insider, many early investors have been holding off on selling after the recent price drop made it difficult to realize the returns they had anticipated. Some said they would consider selling if the stock recovers to around $130, while long-term investors indicated they intend to hold, placing more weight on the company's long-term growth potential than on short-term volatility.

While the market appears to have absorbed this round of lock-up expiration without major disruption, analysts see the actual scale of selling by existing investors at the year-end and mid-2027 unlocks as the key variable that will determine where SpaceX shares go from here.