SpaceX shares went up in premarket trading on Monday as another batch of stock was about to become available.
Shares of Elon Musk’s rocket and AI company increased by 0.8%, which was similar to the small changes seen in broader index futures.
The increase happened as about 319 million shares owned by early investors and insiders were about to become available for trading. In early June, SpaceX sold around 556 million new shares to the public, raising about $75 billion before including the underwriters’ overallotment option. This amount is a small part of the company’s total 13.2 billion shares.
Usually, insiders and early investors cannot sell their shares for about 180 days after an IPO. SpaceX chose a different approach by unlocking smaller amounts of stock at different times. About 912 million shares became available to trade on August 6, and another 319 million will unlock on August 20. Over 700 million shares are set to unlock in September, and more than 650 million in October. By the end of the year, about 4.9 billion SpaceX shares will be tradable, which is around 70% of the shares not owned by Musk.
The way supply and demand changed with these unlocks has strongly affected how the stock trades. Worries that early investors might sell led the stock to trade well below its IPO price in July. The shares bounced back after a strong second-quarter earnings report on August 4 and the first unlock event two days later.
The stock jumped the week of the earnings report and went up again last week. This marked two weeks in a row of gains after four weeks of losses.
