Shares of Space Exploration Technologies have followed a familiar IPO trajectory: a sharp initial surge after listing, followed by a pullback that has left the stock down roughly 22% from its peak. Investors are now weighing whether any rebound can extend further, against the risk that future insider selling could intensify volatility as lockup restrictions loosen.
Key takeaways
- Price move: SpaceX shares are down about 22% from their post-IPO peak.
- Catalyst: Potential demand support could come from index-related buying if SpaceX is added to the Nasdaq-100.
- Key implication: Insider selling tied to lockup expirations could create sustained downward pressure.
- Broader signal: Historical patterns across large U.S. IPOs suggest early pullbacks are common, and outcomes vary widely for long-term investors.
The IPO stock playbook
University of Florida finance professor Jay Ritter has studied thousands of U.S. IPOs since 1980, finding that the average IPO stock tends to jump about 19% on its first day. The article also points to notable examples of high-profile IPOs that retreated after the initial enthusiasm. Tesla’s shares fell by more than 30% after its 2011 IPO, while Meta Platforms—then Facebook—declined by more than half of its market value in roughly the first four months of trading.
Looking at the largest IPOs, the research highlighted in the piece shows that among the 15 largest U.S. IPOs since 2006, the average stock dropped around 50% below its IPO price at some point during the following 12 months. Average first-year returns for these issues were roughly 33% losses, though the distribution was wide: some investors who held through the early drawdowns were later rewarded, while others saw persistent underperformance. Rivian, for example, is cited as a case where shares declined more than 80% from the IPO.
What driven the attention on SpaceX shares
SpaceX delivered what the article describes as the biggest IPO in history, followed by a multi-day surge after the deal. That initial bid has since faded, leaving investors focused on the next potential drivers of supply and demand. Two near-term factors stand out: the stock’s likely upgrade in index eligibility and the schedule for insider lockups becoming sellable.
Nasdaq-100 inclusion could bring mechanical buying. The article says SpaceX could be added to the Nasdaq-100 Index after the market close on July 6, 2026. If confirmed, index-tracking exchange-traded funds and mutual funds would be required to own the underlying constituent, which can increase near-term buying pressure around reconstitution dates.
Lockup expirations could increase share supply. After SpaceX’s second-quarter earnings report—described as likely in mid-August—the article notes that insiders would be able to sell 20% of eligible insider shares. It also states that the allowable percentage could rise by an additional 10% if the stock trades at least 30% above its IPO price during five of 10 consecutive trading days leading up to the Q2 update.
Market reaction risk: supply coming into focus
Beyond the earnings-related step-up, the piece points to multiple additional time-based lockup expirations after the IPO, during which insiders can sell incremental portions of shares. It says insiders can sell up to 7% of shares at 70, 90, 105, 120, and 135 days following the IPO. After the Q3 earnings update, the article states that an additional 28% of shares could become sellable.
Investors typically interpret large, scheduled insider sales as a potential signal of rising supply, especially if they coincide with periods of weaker demand or broader market risk-off conditions. The article argues that insider selling occurring in high volumes would likely weigh on the stock.
Why investors are likely to watch fundamentals alongside technical catalysts
While index inclusion can support prices temporarily, the article emphasizes that valuation still matters. It claims SpaceX has a market capitalization above $2.2 trillion and generated $18.7 billion in revenue last year, noting that the company is growing but, in the author’s view, not yet enough to justify the premium valuation implied by the stock’s level.
That framing matters because an IPO rally can be driven by expectations and sentiment, while sustained performance depends on operational milestones, profitability trajectory, and the market’s reassessment of long-term growth. In that context, upcoming earnings can act as a catalyst by shifting expectations for future revenue, margins, and cash generation—factors that can either absorb or amplify the impact of insider-driven selling.
What to watch next: Investors will likely focus on the timing and details of SpaceX’s second-quarter earnings report in mid-August, the confirmation and effective date of Nasdaq-100 inclusion, and the stock’s path into the periods preceding lockup-related sale windows. Together, those developments could determine whether any rebound can persist or whether supply dynamics and valuation concerns dominate trading.
