Wall Street is bracing for more volatility in SpaceX (SPCX) stock as millions of shares unlock on Aug. 6 and can be sold by the company’s early investors.
A total of 911.5 million SpaceX shares are now unlocked and can be sold following the company’s first earnings report on Aug. 4.
This means that early investors in SpaceX, including employees and venture capitalists, are free to sell their stock on the open market.
Analysts expect a wave of selling to occur as early investors in SpaceX book profits and reduce or exit their holdings in the commercial space vehicle led by Elon Musk.
The unlocked shares are poised to hit the market with SpaceX stock already down substantially since its June initial public offering (IPO).
SPCX stock fell 12% on Aug. 5 after the company delivered financial results that showed rising spending on artificial intelligence (A.I.).
At $108.27 U.S. per share, the stock is already well below its IPO price of $135 U.S. per share and has fallen 52% from a peak of $225.64 U.S. reached days after its market debut.
SpaceX has also become one of the most heavily shorted stocks in the market as traders bet on further declines in the share price. More than 30% of SpaceX’s available stock is sold short.
Elon Musk has taken to social media to criticize the short sellers for betting against him and his company.
