SpaceX Stock’s Unlock Conundrum: A Market Puzzle Unfolded

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(SeaPRwire) –   By: Oliver Hawthorne

SpaceX (SPCX) stock took a pre-market hit Thursday, dropping over 1% as 319 million shares became eligible for trading. This follows a larger 911 million share unlock on August 6, which surprisingly saw the stock rise 6%. So, the first unlock didn’t trigger a wave of selling. Now, investors are watching closely to see if this second unlock plays out differently. SpaceX’s stock has a low correlation with the Magnificent Seven megacaps. Its correlation with the Mag Seven sits at just 0.28, far lower than Apple’s 0.7 correlation with the S&P 500. That means SpaceX doesn’t move in lockstep with the tech giants, trading more like a broad market risk gauge.

Analysts remain bullish despite the recent dip. The average price target stands at $232.35, implying over 66% upside from current levels. But there’s more unlocks on the horizon. Another 319 million shares are set to become eligible in September, and by December, around 40% of SpaceX’s total stock could be freely tradable. The stock had a strong IPO, closing its first day at $161.11, 19% above the $135 IPO price. It later hit a post-IPO high of $225.64 but plunged after its first quarterly earnings report, falling below $105. Now, it’s recovering, up about 2% over the past five trading days, but remains well below that post-IPO peak.

DataTrek’s Jessica Rabe noted SpaceX’s unique trading behavior. Unlike the Magnificent Seven, SpaceX shows negative correlations with some, like Amazon and Meta. Instead, it’s more tied to broader market sentiment. When investors are optimistic, they buy SpaceX; when nerves rise, they sell. It also trades closely with other space stocks, such as Rocket Lab and AST SpaceMobile.

Wall Street isn’t losing faith. Clear Street’s Brian Dobson keeps a Buy rating with a $217 price target, citing U.S.-based production and cleared supply chains as advantages. UBS’s John Hodulik also holds Buy, pointing to long-term growth in Starlink and other technology businesses, including potential upside from Starlink Mobile and the V3 satellite constellation expansion. Across TipRanks, there’s a Moderate Buy consensus, with 24 Buy ratings, six Holds, and two Sells.

The key question now: Will the upcoming unlocks test investor sentiment? The first large unlock didn’t cause a sell-off, but this time, with more shares set to hit the market, will the dynamics change? SpaceX’s journey since its IPO shows it’s a volatile yet potentially rewarding stock. Analysts see long-term growth, but short-term unlocks add an element of uncertainty. For now, the market is watching to see if this unlock follows the pattern of the last one or breaks new ground. Author bio: Oliver Hawthorne, Principal Correspondent permanently stationed at an international technology review