Eight weeks ago, on June 12, Elon Musk's artificial intelligence (AI) and space infrastructure goliath rewrote history. Space Exploration Technologies (SpaceX) (SPCX -13.61%) raised more capital than any initial public offering (IPO) before it, $85.7 billion (including the underwriters' overallotment), and quickly galloped to a nearly $3 trillion valuation in its first week as a public company.
However, the retail investor buzz that preceded SpaceX's debut has since faded -- and so has SpaceX's stock. The company's shares have plunged 52% below their all-time intraday high, as of the end of July, and things may be about to get a whole lot worse.
Image source: Getty Images.
SpaceX's early release-eligible insiders can start selling their shares
SpaceX's IPO was nontraditional in several respects. It was the largest public debut in Wall Street's history, with a whopping 21 underwriters. It also featured an accelerated and staggered share-unlock schedule for early release-eligible insiders.
An insider is a high-ranking executive, board member, or early investor who may possess non-public information. Traditionally, companies going public prevent insiders from selling their shares for the first 180 calendar days to ensure that they're not taking advantage of early IPO gains or retail investor buzz.
Great look at the SpaceX shares unlock schedule as well as the potential passive buying schedule from @JSeyff @FrancisSharoon Depending on the early post-IPO returns, this could really play with and disperse the returns of "passive" funds (which is why there's arguably no such... pic.twitter.com/KOuEkJlngF
-- Eric Balchunas (@EricBalchunas) May 28, 2026
SpaceX marched to its own drum when establishing its lockup schedule. The first share-unlock milestone occurs on the second trading day after the company's first quarterly report as a public company, which was Aug. 4. Today, Aug. 6, marks the second trading day post-earnings. Every two to three weeks through mid-December, new unlock milestones occur, allowing early release-eligible insiders to sell their shares.
This particular unlock event allow 20% of early release-eligible shares to be sold by insiders, equating to approximately 911.5 million shares. Based on SpaceX's July ended share price, this represents up to $99 billion in potential selling pressure waiting in the wings.
Image source: Getty Images.
Insider sales can swamp retail investors and SpaceX stock
But it's not just insiders having the ability to sell that's the problem. SpaceX's IPO float (i.e., the number of tradable shares) can exacerbate this headwind.
Typically, companies going public sell between 10% and 25% of their outstanding shares. Although SpaceX sold roughly 555.6 million shares in its IPO, this represented less than 5% of its outstanding shares. Passive funds have gobbled up a sizable percentage of these shares following the company's fast-track entry into the Nasdaq-100, Russell 1000, and Russell 3000. In other words, a strong argument can be made that SpaceX's low float has provided an artificial boost to its share price.
SpaceX IPO float unlock timeline:
-- Wall St Engine (@wallstengine) June 19, 2026
Initial free float: ~4.9%
Potential float available:
Aug 8: ~11.8%
Aug 20: ~15.2%
Sep 9: ~17.7%
Sep 24: ~20.1%
Oct 9: ~22.6%
Oct 24: ~25.1%
Dec 8: ~40%
Mar 18, 2027: ~44.1%
May 17, 2027: ~46.7%
Jun 12, 2027: ~50.8%
Musk's 46.1%... https://t.co/NBcYDs8caF pic.twitter.com/uORObGn042
Opening the proverbial dam to early release-eligible insiders can effectively flood the market with newly tradable shares, swamping SpaceX's stock and retail investors.
To be clear, it's highly unlikely that every eligible early release insider (Musk is not among them) will be running for the exit. Nevertheless, several early investors and executives have had limited or no avenues to cash in their chips amid SpaceX's decade-long parabolic valuation climb.
Aug. 6 may mark the start of a long and drawn-out period of weakness for Musk's AI and space titan as Wall Street struggles to absorb several rounds of insider selling pressure.
