The first batch of over $100 billion in stocks will be unlocked on Thursday. SpaceX (SPCX.US) faces the first test of its nine-phase lock-up period arrangement, with the market on alert for selling pressure and extreme fluctuations.

After the stock price of SpaceX (SPCX.US) fell below its IPO issue price, investors who still hold the stock are facing their next test. According to the schedule, on Thursday local time, approximately $101 billion worth of SpaceX shares will be unlocked for the first time, allowing insiders to begin selling their holdings. Due to the unprecedented nine-stage phased unlocking mechanism and the large scale of the initial unlock, the market generally expects that SpaceX's stock price may face a new wave of volatility. Typically, IPO companies set a lock-up period to restrict internal shareholders from selling their stocks for a period after listing. However, SpaceX did not adopt the traditional method of a one-time unlock after a 180-day lock-up period, but instead designed a phased approach with nine stages to mitigate the impact of a mass sell-off. Peter Singlehurst, head of the Baillie Gifford private company team that invested in SpaceX back in 2018, stated: "We have never seen such an arrangement, we have never seen an unlocking of such scale, and we have never seen a phased implementation of a lock-up period. It can be said that we are in uncharted territory." According to the prospectus, a maximum of 911.5 million shares will have their restrictions lifted on Thursday, increasing the circulating shares from the current approximately 639 million to up to 1.55 billion, effectively more than doubling the circulating stock size. This unlocking coincides with a period of intense volatility for SpaceX's stock price. Following the release of the companys first quarterly report, the stock dropped 13% in a single day, nearly erasing most of the more than $250 billion market value growth accumulated over the previous two trading days. On Wednesday, SpaceXs stock fell again by more than 10%, reverting back to around $110 per share, which represents a cumulative decline of about 38% from the historical high reached on June 16. SpaceX has operated as a private company for over twenty years and has recently completed the acquisition of xAI, alongside its earlier acquisition of Twitter. Therefore, its shareholder structure is extremely complex, encompassing a large number of long-term institutional investors, early employees, and private equity investors. Despite the stock price currently being significantly below the IPO issue price of $135, many early investors still possess substantial paper gains, raising market interest in whether profit-taking behaviors will occur following the first unlock. At the same time, the short-selling pressure is also increasing. According to S3 Partners statistics, as of Tuesdays close, about 35% of the currently tradable shares have been sold short. As the stock price has declined from its highs, shorts currently have an accumulated unrealized gain of about $5.3 billion. However, most analysts remain optimistic about SpaceX's long-term development prospects and believe the company still has several potential catalysts in its future. Among these, the highly anticipated 14th launch of the Starship rocket is scheduled to take place later this month. The market generally considers that this project will become an important foundation for SpaceX's "space data center" strategy. Additionally, the company plans to utilize the Starlink satellite internet network to directly compete with major U.S. mobile operators. From a performance perspective, SpaceX's quarterly revenue exceeded analysts' expectations, primarily benefiting from its Starlink satellite internet business, which is currently the only profitable segment of the company. However, the company's AI-related capital expenditures have surpassed market expectations, which has also contributed to the recent stock price decline. David Wagner, a portfolio manager at Aptus Capital Advisors, stated: "Before the last large-scale unlocking in December this year, many investors are reluctant to buy SpaceX solely based on fundamentals, as the continuous selling pressure from the unlocking remains. Frankly, we feel the same way." For long-term investors, partially cashing out also holds attraction. Previously, when xAI merged with SpaceX, the overall valuation was approximately $1.25 trillion, while the current market value is about $1.5 trillion. Many investors who indirectly held shares of SpaceX and xAI through special purpose vehicles will now begin to receive stock allocations following the unlocking and will have the opportunity to sell their holdings. Singlehurst mentioned that the first batch of unlocking is likely to become "the largest single-day increase in circulating shares of a single company in history." He said, "What will happen that day? Frankly, I don't know either." In reality, this Thursday is only the beginning of the entire unlocking plan. Bernstein analysts pointed out that SpaceX is adopting an "extremely complicated" nine-stage unlocking scheme, rather than the traditional one-time complete unlock after the end of a 180-day lock-up period. According to regulatory documents, SpaceX will not face the largest subsequent unlocking until early December this year, when the number of circulating shares will further surge to 5.33 billion, meaning the market will continue to confront potential selling pressure over the coming months. It is worth noting that due to expectations of a smaller circulating supply and significant price volatility in the initial period after listing, some long-term investment institutions, including Baillie Gifford, even pre-emptively realized part of their gains before SpaceX's IPO to mitigate holding risks. Since its listing, SpaceX's market value has surged nearly $1 trillion within just a few days, only to evaporate by about $1.2 trillion afterward. With over $100 billion worth of shares set to be unlocked, Wall Street broadly anticipates that this highly watched aerospace and artificial intelligence company may once again experience dramatic fluctuations.