SpaceX Prepares to Unlock 328 Million Shares for Sale on October 9

SpaceX stock is preparing for a new test as sales restrictions expire on a new tranche of shares, with up to 328.4 million Class A shares becoming available for sale on October 9, according to a report by TipRanks.

This tranche represents about 7% of the shares subject to lockup restrictions and comes as part of the phased structure adopted by the company upon its listing on June 12 at $135 per share, when it offered only between 4% and 5% of its shares on the market.

Subsequent tranches will follow after that, with one due on October 24 and another following the announcement of third-quarter results. The report notes that the expiration of sales restrictions gives investors the ability to sell, rather than an obligation to do so, and that the expected increase in supply could put pressure on the price if shareholders rush to exit around the same time.

The previous September 24 tranche provided an indicator described by the report as relatively reassuring, as the stock's movement that day was limited to a decline of just 0.2%, even though the volume of shares available for trading could triple by December if subsequent tranches are fully executed. The impact of this on the price remains dependent on the extent to which shareholders actually choose to sell.

What Do These Terms Mean?

Lockup Period: A period during which early shareholders and company employees agree after an offering not to sell their shares, expiring in agreed-upon stages.

Class A Share: A type of share that typically grants voting rights to its holders and is used to distinguish it from other types of shares in the same company.

Shares Available for Trading (Float): The number of shares that investors can actually buy and sell, also called free float or market liquidity.

Tranche: A specific portion of shares or debt released on a certain date; long lockups are divided into successive tranches to relieve pressure on the price.