SpaceX faces stock decline as 912 million shares hit market Thursday

SpaceX stock is facing a potential downturn as its first lockup period expires on Thursday, allowing employees and early investors to sell their shares for the first time since the company's IPO. This milestone could unleash a significant number of shares into the market, creating pressure on the stock price.

The lockup release means that 912 million shares, more than double the amount currently available for trading, will be eligible for sale. Lockup periods are designed to prevent a sudden influx of insider selling that could destabilize stock prices right after a public offering. However, when these periods end, stocks often see a sharp decline as insiders cash out, leading to increased volatility.

Currently, SpaceX's stock has already dropped nearly 50% from its post-IPO high. The company launched its IPO in June, raising a record $85.7 billion and briefly achieving a valuation of $2 trillion. However, since then, investor sentiment has turned cautious. About $25 billion worth of SpaceX shares, which is more than a third of the available stock, is now held by short sellers who are betting on further declines. This environment of skepticism has added to concerns about the stock's future.

Analysts are divided on what will happen next. A Morgan Stanley analyst has suggested that the stock could fall to around $100, despite maintaining a bullish long-term outlook. For a company that made headlines just two months ago, this impending sell-off could lead to a rocky period ahead, impacting both investor confidence and Elon Musk's financial standing.