Don’t expect SpaceX’s tough situation to end anytime soon. SpaceX has not yet traded on the public market for a full week, but the stock price is already proving volatile. After its blockbuster IPO on June 12, Elon Musk’s rocket maker’s market capitalization soared past Amazon and even Microsoft, before falling again. The stock is already down more than 28% from its recent highs, and at one point fell below its opening price of $150. In the end it was around $161. We don’t expect this selling pressure to abate anytime soon, especially as the lockup expires and more insiders gain permission to sell. SpaceX debuted with only about 5% of its roughly 13 billion shares outstanding, which means more shares will become available in the coming months, leading to even more stock price volatility. Companies typically choose a lock-up period of 90 to 180 days to prevent insiders from selling stock immediately after an IPO and to stabilize the stock. But SpaceX chose a schedule that would cause the lockup to expire over time. SPCX 1M Mountain SPCX Under Pressure According to 22V Research, the key dates to watch are: Around August 10th: +20% (additional 10% if inventory is above $175) Around August 21st: +7% Around September 10th: +7% Around September 25th: +7% Around October 10th: +7% 10 Around the 25th of May: +7% Around the beginning of November (3rd quarter earnings): +28% Around the 9th of December: Most insiders have stock left With each new release on the calendar, investors can expect a large wave of supply to hit the market, likely causing prices to fall. That means investors could find a better position to buy SpaceX than they currently do. Jeff Jacobson of 22V Research said he is keeping an eye on options strategies around the Sept. 18 expiration date. He would then consider a call sale trade for $200 calls at $25, or a deal to sell SpaceX for exactly $200 between now and expiration, recouping $25 per share. “Given what we know about the potential overhang from the expected unlock by September 10th, I think selling calls on existing (or new purchases) SPCX should be strongly considered,” he said over the weekend.
