The best day in history: SpaceX stock surges
Within one week, SpaceX stock passed two stress tests: its first quarterly report as a public company and the largest share release in its history. On Friday, it jumped 15.8% and ended the week with a rise of about 23%, but it is still trading below the IPO price. What pushed it up, and what else lies ahead?
SpaceX (SPCX) stock, led by Elon Musk, recorded its best day on Friday since it began trading, surging 15.8% to close at $133.11 — its highest close since mid-July.
The surge capped a dramatic week in which the company underwent two events that could each have caused it to fall sharply: its first financial report as a public company and a massive share release that doubled the supply of tradable shares.
Instead of falling, the stock ended the week with a rise of about 23% — but even after the jump, it is still trading about 1.4% below the IPO price of $135, and about 11% below the opening price in June of $150.
On Tuesday, SpaceX released second-quarter results that beat expectations, with revenue and adjusted EBITDA significantly higher than forecasts. But investors were not impressed: what caught their attention was the surge in AI infrastructure spending to $15.8 billion for the quarter, compared to $7.7 billion in the first quarter — a doubling within three months. Beating forecasts was not enough to calm fears about ballooning capital expenditures, and the stock plunged 13.6% on Wednesday to an all-time low.
And then came the event that kept investors awake: on Thursday, the first lock-up phase expired, and 911.5 million shares became available for trading for the first time — about 43% more than the 638.9 million shares the company issued in June.
The release more than doubled the tradable quantity in the market, from 4.9% of all shares to 11.8%. Usually, when such a flood of supply enters the market while the stock is already below the IPO price, holders rush to sell before the price drops further. This time, the opposite happened — the stock rose 6.1% on Thursday.
What makes SpaceX's lock-up structure unique is that it does not release all shares at once, but in nine stages over several months. Thursday's release was the first — and the largest of them all.
According to analysts, it was precisely the declines that preceded the week that allowed it to end so well. Nicholas Owens from Morningstar expected that a significant portion of the released shares would indeed be sold, but estimated that the market had already prepared for this: "It is likely that a large part of the recent decline in SpaceX stock stems precisely from the anticipation of dilution following the lock-up."
Doug Anmuth from J.P. Morgan made a similar argument — that investors positioned themselves in advance for the expiration, "the largest of many that will come in the coming months." Ron Epstein from Bank of America described the release as "short-term technical pressure" rather than a verdict on the company: "As we move through the lock-up stages, this will remove some of the technical pressure from the stock."
Despite the strong week, the reservations are clear. The stock is still trading below the IPO price, and the company has eight more share release stages ahead that will inject additional supply into the market in the coming months. Sam North, an analyst at eToro, put it this way: "This quarter buys Musk credibility and time, but with the shares still below the IPO level, SpaceX will need to continue to deliver exceptional numbers to prevent its valuation from heading back down."
In other words, Friday removed one big obstacle — but the stock's ability to hold depends on whether the company continues to execute as the rest of the supply enters the market.
Since SpaceX entered the Nasdaq 100 index, many pension funds, savings funds, and advanced study funds that track the index hold it automatically. After absorbing the declines of recent weeks, they benefited this week from the recovery.
The weight of the stock in the index is relatively small, but its volatility demonstrates once again how much a new, large, and volatile stock can move — even if only slightly — the public's passive savings, and in both directions.
