SpaceX Stock Falls Back Below IPO Price As 319 Million More Shares Hit The Market

SpaceX shares fell below their IPO price on Thursday as roughly 319 million shares held by early investors and employees became eligible for trading, adding another wave of potential selling pressure just over two months after the company's blockbuster market debut.

The stock slipped below the $135 price at which SpaceX went public in June. The latest release is the 70-day tranche in a staggered post-IPO lockup schedule that will eventually make about 88% of the company's roughly 13 billion shares eligible for trading through 2027, according to Yahoo Finance.

SpaceX already faced an even bigger test earlier this month, when about 911.5 million shares became eligible for trading on Aug. 6. Rather than triggering the selloff some investors feared, the stock rose about 6% that day and continued higher afterward amid broader optimism in the markets. The first release increased SpaceX's public float substantially, but demand was strong enough to absorb the additional supply.

Thursday's decline shows investors remain sensitive to the growing number of shares becoming available. The 319 million-share tranche represents roughly 7% of the stock originally subject to selling restrictions, according to MarketWatch, and more releases are scheduled over the coming months. It also happens as markets continue to decline amid concern about a steeper yield curve.

One of the biggest tests is expected around SpaceX's third-quarter earnings in early November, when approximately 1.3 billion additional shares are due to become eligible for trading. Another major lockup expiration follows in December, while CEO Elon Musk's roughly 6.42 billion shares remain restricted until June 2027.

SpaceX's post-IPO volatility has been closely watched since its record-setting June listing. Shares initially surged as high as $225.64 before dropping below $105 and later recovering, leaving the stock vulnerable to sharp swings as investors weigh the company's growth prospects against its enormous valuation and the steady expansion of its tradable float.

The company has also been expanding aggressively beyond its core rocket-launch and Starlink businesses. SpaceX recently completed its $60 billion acquisition of AI coding company Cursor, giving it another foothold in artificial intelligence and enterprise software. Cursor confirmed on Aug. 14 that it had officially joined SpaceX after an acquisition process that began earlier this year.

Deutsche Bank analyst Edison Yu has pointed to several potential benefits from the deal, including Cursor's existing presence among large corporate customers and access to data generated by more than 1 million users. He also sees advantages from combining Cursor's coding software with SpaceX's Grok AI models and computing infrastructure, according to Yahoo Finance.

The bank did not change its $235 price target following the acquisition, but raised its full-year earnings-per-share estimate by 11% and increased its revenue forecast by 1%.

Reports this week also suggested SpaceX had explored acquiring Cognition, the developer of AI coding agent Devin, but both companies rejected that account. Cognition CEO Scott Wu denied that acquisition talks had taken place, with Musk publicly backing his version of events and saying discussions between the companies had focused only on making Grok work well for Cognition's needs.

The latest share unlock comes as some of SpaceX's earliest investors sit on enormous gains. Alphabet's initial $900 million investment in the company in 2015 had grown to about $94.2 billion by the end of June, while Fidelity, Saudi Arabia's Public Investment Fund, Baillie Gifford and BlackRock were among its other major institutional shareholders, Reuters reported last week.