SpaceX shares kept rising in Monday’s premarket trading, adding to Friday’s 16% jump. That surge ended a four-week losing streak after a key share lockup period expired.
Shares of the Elon Musk-led satellite and AI company climbed again Monday as investors showed renewed interest. Since hitting a closing high in mid-June, just after its IPO, the stock had dropped about 30% by Friday.
Many on Wall Street expected heavy selling when SpaceX’s first lockup expired last week, releasing about 911 million restricted insider shares. However, that wave of selling did not happen. The lack of insider sales surprised short sellers and led to short-covering and new buying from institutional investors.
Before the unlock, just 5% of SpaceX shares were available for public trading, which made the stock illiquid and volatile. Now that over 1.5 billion shares are available, large institutional investors can buy in more easily without raising trading costs.
On Monday, Citi repeated its positive view on the stock and raised its long-term revenue forecast. The bank now expects SpaceX could reach about $1 trillion in yearly revenue by 2031, which is close to the company’s own 2030 goal. Citi also said it has more confidence in management’s long-term plans than most of the market does.
Last week, sentiment improved further after SpaceX and Tesla announced a joint $16.8 billion investment to build Terafab, a semiconductor plant in Grimes County, Texas. The facility will make AI chips for Tesla’s robotics projects and SpaceX’s space-based computing network.
After seeing how the market reacted to the first lockup expiration, investors will likely be careful with the next one. Scheduled for August 20, it will release another 7% of restricted shares held by employees and pre-IPO investors. If this event leads to the insider selling that markets expected last time, more volatility could follow.
