A SpaceX rocket crashed into the moon at 2:00 a.m. Wednesday, leaving a massive crater and another piece of “space junk” on its surface. But that will only be the second-biggest dump of SpaceX’s week.
On Thursday, nearly a billion shares of SpaceX, held by early employees and pre-IPO investors, will finally break free from their lockups. The shares, totaling around $100 billion at current prices, are more of a supply shock than the entire IPO itself. And while analysts worry that it will cheapen the stock—or, as Morgan Stanley suggests, provide an opportunity “to gain exposure to a potential generational compounder”—that SpaceX avoided the worst of this moment by quietly lining up its buyers before the lockup clock even started running.
The natural pressure
Every IPO eventually meets this moment, Luria cautioned. Early employees might believe wholeheartedly in the company, but after spending decades with most of their wealth tied up in a single stock, they may want to diversify—buy a house, maybe.
That transfer from private-company insiders to public-market investors is the “natural course of business,” he said—but, by definition, it puts pressure on the share price as fresh supply enters the market.
