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Here's What Retail Investors Need to Know About SpaceX's Lockup Cliff
Key Points
The first set of SpaceX shares is set to be unlocked on Aug. 6, two days after its earnings report.
Employee and investor share sales could put downward pressure on SpaceX's stock.
Investors shouldn't rush to buy SpaceX shares before its first share unlock period.
When a company has its initial public offering (IPO), its shares begin trading on the open market, and the shares that insiders (such as investors, employees, and founders) own officially have value. However, those insiders aren't allowed to sell shares immediately; they have to wait until the designated lockup periods end.
Space Exploration Technologies (NASDAQ: SPCX), better known as SpaceX), executed the largest (and arguably most hyped) IPO in stock market history, initially trading with a $1.77 trillion valuation. And after being invested and working for years or decades, you can bet plenty of insiders are ready to cash in and make moves on that house or dream car they've been eyeing.
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Here's what you should know about SpaceX's lockup cliff.
Image source: The Motley Fool.
How SpaceX's lockup cliff is scheduled
When SpaceX had its IPO, only around 4% of its shares were made available to the public. The rest will be gradually released as key dates are reached. Here is SpaceX's current lockup period schedule and how many shares are expected to be released at each point.
| Key Dates | Days Post-IPO | Supply Released |
|---|---|---|
| Aug. 6, 2026 | 55 days | 20% to 30% |
| Aug. 20, 2026 | 70 days | 7% |
| Sept. 9, 2026 | 90 days | 7% |
| Sept. 24, 2026 | 105 days | 7% |
| Oct. 9, 2026 | 120 days | 7% |
| Oct. 24, 2026 | 135 days | 7% |
| Late October or early November 2026 (Q3 earnings) | TBD | 28% |
| Dec. 8, 2026 | 180 days | Remaining employee balance |
| February 2027 to August 2027 | 240 to 420 days | 100% of institutional investors |
| June 12, 2027 | 366 days | 100% of Elon Musk's stake |
Data source: SpaceX's 424B4 filing.
SpaceX is scheduled to release its first earnings report on Aug. 4, which will trigger the first set of share unlocks, slated to happen on Aug. 6.
How will SpaceX's stock perform after its initial lockup period?
We can't predict how any stock will perform, but generally with an IPO, we see more volatility because insiders are unloading some of their shares. If you worked for a company for a decade or made an early investment, you likely want to see that work turn into cash and not just a number on paper.
With more people selling shares than buying, SpaceX's stock could take a temporary hit. Of course, this assumes insiders want to offload shares, which might not be the case, but chances are many will want to cash in while the stock is valued so highly (though it's trading lower than its initial IPO price as of July 21).
There's no need to rush to invest in SpaceX right now. Waiting until after the first one or two lock-up periods have expired is a smart choice for most investors.
Stefon Walters has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.