SpaceX is expected to report earnings next week, followed by a lockup expiration that could free nearly 1 billion pre-IPO shares for sale.

  • A larger float could boost SpaceX’s weight in QQQ, where it already represented 0.98% of the portfolio as of July 22.
  • Morningstar warns the upside from index buying may be outweighed by selling, with more than 6.4 billion shares potentially becoming eligible over time.
  • Investors are also watching SpaceX’s shift from Falcon 9 toward Starship.

Shares of SpaceX (SPCX) fell 2% overnight late Sunday as attention turned to next week’s earnings and a looming wave of post-IPO lockup expirations that Morningstar says could significantly increase the company’s weight in major index funds. 

SPCX stock fell 3% on Friday to $115.07, extending its weekly loss to 7% and marking a third consecutive week in the red. 

SpaceX Lockups Could Boost QQQ Weight 

SpaceX is expected to report its first earnings as a publicly traded company on Aug.4. Just two days later, nearly 1 billion shares held by pre-IPO investors could become eligible for sale, which is more than the 629 million shares sold in the company’s June 12 IPO, according to Morningstar.

The key is SpaceX’s unusually small float. The company floated only about 5% of its shares at IPO, versus roughly 20% for a typical offering, according to Renaissance Capital strategist Matthew Kennedy. As lockups expire, Morningstar estimates SpaceX’s public float could triple by the end of September. If the share price stayed unchanged, its float-adjusted market cap could rise to about $675 billion in Nasdaq’s calculations, placing it between Walmart and Intel. 

The Invesco QQQ Trust Series 1 ETF (QQQ), which tracks the Nasdaq-100 index, held 39.7 million SpaceX shares worth $4.57 billion as of July 22, representing a 0.98% portfolio weight. “Every lockup expiration is an opportunity for SpaceX to claim a greater share of cap-weighted index funds,” Morningstar said. Unlike most stocks, SpaceX does not need a rally to gain index weight. “SpaceX is different; it will also claim a higher weight if its stock price increases, or if its float percentage goes up.”

SpaceX Lockups Could Outweigh Index Demand 

The lockups could boost index demand while also adding heavy selling pressure. Morningstar said another 455.8 million shares may unlock around Aug. 20, with further releases through the IPO’s first anniversary. More than 6.4 billion shares could eventually become eligible for sale.

“We believe that most of the available shares will come to market,” Morningstar said, citing early investors’ “low cost basis and long holding periods.” It called the setup a “large technical overhang” and warned that lockup supply could “outweigh demand even from index funds.”

SpaceX priced its IPO at $135, surged above $201, then fell as low as $110.85, leaving peak buyers down about 45%. Morningstar still sees the stock as significantly overvalued and said the slump may already reflect “anticipation of the dilution from the lockup.” Koyfin estimates call for a quarterly revenue of $6.87 billion, earnings before interest, taxes, depreciation, and amortization (EBITDA) of $2.11 billion and an adjusted loss of $0.22 per share.

On the other hand, Morgan Stanley reiterated a $300 price target on Friday, saying that the selloff has outpaced any change in fundamentals. “We believe the current disconnect between increasingly bearish investor sentiment and largely unchanged fundamentals creates an attractive entry point in SpaceX shares,” the firm said.

SpaceX Pivots From Falcon 9 To Starship 

Investors are also watching SpaceX’s pivot toward Starship, its next-gen, fully reusable rocket that will eventually replace Falcon 9. Bloomberg reported on Friday that the company is turning away some Falcon 9 bookings beyond 2028 and has stopped taking future rideshare reservations. 

Meanwhile, Starship successfully deployed its third-gen Starlink satellites on Friday, but the Super Heavy booster failed during its simulated landing. SpaceX said that a Starship carrying 60 next-generation Starlink satellites could deploy about 20 times the downlink capacity of a Falcon 9 mission.

How Do Retail Traders Feel About SPCX?

On Stocktwits, retail sentiment for SPCX improved to ‘neutral’ from ‘bearish’ levels a week ago amid ‘high’ message volume.

One user said, “$SPCX not even close to the bottom! Going to $60 easily after additional float is added to public. Private equity bought $35 and lower. They are going to sell and dump all over you”

View this Stocktwits post

Another user said, “$SPCX Im pretty surprised this hasn’t budged to the upside since a hugely successful launch. Should see a rally tomorrow!”

View this Stocktwits post

SPCX stock has declined 26% over the past month.

For updates and corrections, email newsroom[at]stocktwits[dot]com.<