SpaceX's first lock-up expiration will release potential stock supply worth approximately $102.3 billion. SPCX has already dropped by half from its peak. The real test on the lock-up expiration day may not be how large the sell-off is, but how much the market had previously overestimated the sell-off. Wall Street likes to portray lock-up expiration days as a cliff. On SpaceX's cliff, a striking number is written: 911.5 million shares. Image | SpaceX's listing day dominated the screens in New York's Times Square. The company initially had very few publicly tradable shares, and the scarce supply once amplified market buying. The company will release its first quarterly report after listing on August 4. According to its phased lock-up schedule, up to 911.5 million shares held by employees and some early investors will become eligible for sale on the second full trading day after the earnings report. At the current price of $112.20, the nominal value of these shares is about $102.3 billion. If the schedule remains unchanged, the market will see the real supply for the first time around August 6. "Becoming eligible for sale" is easily mistranslated as "about to be sold." There is a decision by each shareholder between the two. The lock-up documents do not click "sell" for employees, nor do they require early funds to exit on the same day. They only remove a restriction: shares that could not be sold before can now be sold. How much the stock price is impacted depends on how many participate, how fast they sell, and how much capital is willing to buy on the other side. The market currently knows the first number but knows almost nothing about the rest. Nine hundred million shares is a license to enter the public market when SpaceX goes public.
