A.I., Crypto & Tech Stocks

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SpaceX shares faced a critical test last week as the first major lockup period following its record June IPO expired, unlocking more than 911 million shares for early investors. The release represents roughly 7% of shares outstanding—exceeding the 639 million shares sold in the initial public offering itself—and has raised concerns about potential selling pressure on a stock already more than 50% below its mid-June peak.

The company went public on the Nasdaq in June and quickly climbed from an opening level near $150 to above $225. Since then, the path has been turbulent. Shares closed Wednesday at a low of $108.27 after the company’s first earnings report revealed capital expenditures more than double its revenue. The stock has largely traded near the $110 level since late July, with downside momentum slowing. It, however, jumped 6% on the last trading day of the week but is still not close to its all time high.

The 14-day relative strength index bottomed late last month, and implied volatility has fallen to its lowest point since June 30. On the day the lockup lifted, shares were higher, defying expectations of immediate heavy selling.

More shares are set to become available soon. Another 319 million could unlock on August 20, followed by roughly 700 million in September and a similar amount in October. Elon Musk, the company’s largest shareholder with more than 6 billion shares, remains locked up until June 2027.

Analysts and market observers have mixed views on the near-term impact. Greg Martin, co-founder of Rainmaker Securities, said that the stock’s short-term direction may be driven more by the lockup release than by underlying fundamentals or strategy.

Mizuho analysts noted that while the increase in potential supply is meaningful, eligibility to sell does not mean the entire tranche will hit the market. Still, some early investors are preparing to exit. Atlanta Falcons safety Jessie Bates III, who acquired a stake for about $150,000 in 2022 when SpaceX was valued at $127 billion, said he plans to sell his entire position to lock in gains. At the current $1.43 trillion valuation, that stake is potentially worth more than $1.5 million. Bates’ investment manager noted his portfolio has also included other pre-IPO technology names.

Against this backdrop of supply concerns, options activity suggested that some sophisticated traders see a potential bottom forming. Of the roughly $600 million in premium traded by midday Thursday, $316 million was in puts, with about $166 million likely representing put sales—a shift from the earlier pattern of aggressive out-of-the-money call buying. Two of the largest trades were bullish risk reversals that combined multimillion-dollar put sales with long call purchases.

Shortly after the open, one participant sold $12 million of the June 2027 90-strike puts and bought $4.3 million of the corresponding 220-strike calls, collecting a net $7.7 million credit. The structure effectively bets that SpaceX will not fall another 20% over the next ten months while leaving room for a potential doubling. A smaller version later in the day involved selling $3.5 million of January 2028 75-strike puts and buying an equal number of 185-strike calls for $5 million, resulting in a net debit. These trades, favored by larger players who sell options rather than simply buy calls, point to expectations of stabilization rather than an immediate sharp rally.

SpaceX has pursued significant strategic moves, including its February merger with xAI that valued the combined entity at $1.25 trillion and a pending $60 billion acquisition of Cursor expected to close this quarter. Investors and policymakers continue to watch whether heavy spending on artificial intelligence and related infrastructure will eventually support stronger productivity and growth, even as the elevated capital intensity weighs on near-term results.

For now, the market is balancing the risk of additional supply against technical signs of exhaustion on the downside and a clear change in options positioning. Whether the first lockup expiration marks a lasting low or merely a pause will depend on how many of the newly freed shares actually come to market and how the company executes on its ambitious capital plans in the months ahead.

Note: this was written on Thursday and edited on Friday.

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