The Space Exploration Technologies (SPCX +8.25%) IPO may have been the biggest market event this year.
Elon Musk's space company went public at a valuation of $1.75 trillion, raising $75 billion, making it the biggest IPO in history. After jumping out of the gate, however, the stock now looks like a broken IPO, down more than 10% from its $135 IPO share price.
SpaceX is set to report its first quarterly earnings after the market closes today, and all eyes will be on the company. Analysts expect it to post revenue of $6.82 billion in the period. The company did not disclose its revenue in the quarter a year ago, but that's up roughly 50% sequentially, driven by new data center leasing agreements with Anthropic, Google, and Reflection AI, which are expected to make up roughly $2.18 billion in revenue. Revenue from Starlink, or its connectivity business, is projected at $3.83 billion, and the remainder, or $835 million, is from the space segment.
On the bottom line, analysts expect adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) of $2.1 billion, due to a large depreciation line item from its capital investments, and an adjusted per share loss of $0.23.
Options markets are pricing in an implied move of 14%-15% on the report, but while the stock could swing big, SpaceX's first report isn't as important as it would be for most IPOs. That's because so much of the company's valuation is based on future development like orbital data centers, which are likely several years away. Additionally, the company says it has identified a $27 trillion addressable market, primarily in AI, though it will take years to begin tackling it. Elon Musk may hype up the company's future on the call, but the quarterly numbers will have little to say about that future.
There is, however, another event later in the week that could be more meaningful for investors.
Image source: SpaceX.
Here come the lockups
In addition to the earnings report, this week is key for SpaceX because Thursday marks the first expiration in a series of lockups over the next year that will allow insiders to sell their shares.
On Thursday, 911.5 million shares of the stock will be released from restriction, more than doubling the current float. Just 555.6 million shares were sold in the IPO.
Lockup expirations sometimes trigger sell-offs in stocks as they can significantly increase liquidity. SpaceX stock soared out of the gate in part because there was a limited float available. Investors were fighting over $75 billion shares for a company then valued at nearly $2 trillion and with an unparalleled mission of making human civilization multiplanetary.
NASDAQ: SPCX
Key Data Points
However, the lockup isn't a guaranteed sell-off. If insiders generally hold onto the shares, the market may interpret that as a bullish signal that insiders see the stock going up over the long term and bid the stock up accordingly.
The SpaceX IPO has created a lot of wealth for early investors and insiders, and we're likely to see some selling to take advantage of that. The insider response could also hinge on the second-quarter earnings report and the market's response to that.
If the stock goes up on Wednesday, that could encourage insiders to hold beyond Thursday's lockup expiration. Alternatively, if the stock plunges, they could be spooked into selling, fearful that SpaceX shares could fall even further.
