By Maksym Misichenko · Nasdaq ·
What AI agents think about this news
The panel is largely bearish on SpaceX's upcoming IPO, citing risks such as a high valuation, execution challenges, and potential regulatory hurdles that could impact the staggered unlock structure and index inclusion.
Risk: The high valuation and potential earnings shortfall, which could lead to significant selling pressure due to the staggered unlock structure.
Opportunity: None explicitly stated by the panel.
This analysis is generated by the StockScreener pipeline — four leading LLMs (Claude, GPT, Gemini, Grok) receive identical prompts with built-in anti-hallucination guards. Read methodology →
The SpaceX IPO is expected to value the company at at least $1.8 trillion, making it one of the largest publicly traded companies in the world.
Rather than a typical lockup of 180 days, early investors will be able to begin selling shares shortly after the company's second-quarter earnings report.
Leave it to Elon Musk to find a way to do things differently.
The famed CEO is preparing to take SpaceX public in an offering that surely will be well north of $1 trillion. But he’s doing so in a way that is markedly different from other IPOs. And the result could create even more demand for SpaceX stock after the company files its first earnings report as a publicly traded entity.
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Let’s look at the unusual -- but not unprecedented -- plan for the upcoming SpaceX IPO.
SpaceX is arguably one of the top private companies operating in outer space, having conducted hundreds of missions, including transporting astronauts to the International Space Station and employing reusable rockets.
Earlier this year, SpaceX acquired another Musk company, xAI, putting Musk’s AI aspirations, the rocket company, and SpaceX’s Starlink satellite internet network under one umbrella. At the time, Musk said that he would “create the most ambitious, vertically integrated innovation engine on (and off) Earth, with AI, rockets, and space-based internet.”
That merger was valued at $1.25 trillion when it closed in February, with SpaceX valued at $1 trillion and xAI at $250 billion.
SpaceX is now targeting an IPO in June, with a value of at least $1.8 trillion. That would make SpaceX larger than Tesla, which is also owned by Musk. SpaceX would rank in the top 10 of publicly traded companies in the world by market cap.
Image source: Getty Images.
When a company has an initial public offering, major shareholders, such as company insiders and early investors, are prohibited from selling their shares for a set period -- typically 180 days. This lockup period is designed to prevent insiders from artificially crashing the stock price, particularly if the stock price rises dramatically in the first few days after going public. In short, the idea is to allow the market to establish supply and demand, rather than institutional investors.
However, SpaceX is doing things differently. According to the company’s prospectus, SpaceX will allow investors to sell 20% of their stock on the second day of trading after the company’s first earnings report as a publicly traded firm -- in this case, its Q2 earnings report. Investors can sell another 10% of shares if the stock is 30% above the IPO price for at least five of the first 10 trading days after the earnings report.
There are other benchmarks built in as well -- at 70, 90, 105, 120, and 135 days after the IPO. Another 7% of SpaceX shares unlock at each of those points. Musk himself is not allowed to participate in any of the early-release provisions.
There are a couple of benefits here. When the lockup expires in a typical IPO, a large number of shares can suddenly flood the market, leading to a marked drop in the stock price. With a staggered release of SpaceX shares, Musk and his team can eliminate that problem -- especially if the stock proves as popular as many believe it will.
Secondly, the program should increase the number of shares available to trade -- what’s known as the stock’s float. That’s important because Nasdaq recently changed its “fast entry” rule for new listings of large companies to be included in the market-cap-weighted Nasdaq-100.
SpaceX shares will quickly carry one of the highest weights in the index, which means index fund buyers will have to acquire SpaceX stock. That will push the stock price even higher.
But if companies have a small float, Nasdaq will give them a lesser weighting in the index. Therefore, SpaceX has an incentive to make shares available and increase its weighting.
In all, the SpaceX lockup period will differ from what many investors are used to. But there are distinct advantages that should make more shares available while preventing an influx that would push the stock price off a cliff. If the program is successful, it could change the way large tech IPOs -- and there will be several more to come this year -- are structured.
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Patrick Sanders has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Tesla. The Motley Fool recommends Nasdaq. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
Four leading AI models discuss this article
"The unlock schedule is more likely to expose valuation fragility than to deliver sustained index-driven gains."
SpaceX's staggered unlock after Q2 earnings, allowing 20% sales immediately and further tranches at price hurdles, aims to avoid a classic lockup dump while lifting float for heavier Nasdaq-100 weighting. At a $1.8T valuation after the xAI merger, however, this structure risks telegraphing that early investors want liquidity quickly, especially if Starlink margins or launch cadence disappoint. Index buying could provide a short-term bid, but any earnings shortfall would hit a market cap larger than Tesla's with far less transparency. The absence of Musk from early sales changes little if other holders sell into strength.
Even if earnings beat, the $1.8T multiple leaves little margin for the execution or regulatory delays common in aerospace, and staggered supply could cap upside rather than support it.
"The lockup structure isn't investor-friendly—it's a 6-month programmatic insider exit disguised as market stability, and the $1.8T valuation lacks any disclosed financial justification in this article."
The article frames SpaceX's staggered lockup as genius—preventing the typical post-IPO cliff while boosting Nasdaq-100 float weighting. But this ignores a critical risk: the structure is explicitly designed to keep the stock artificially elevated during index inclusion. Once SpaceX reaches equilibrium weighting and early investors begin systematic selling (20% at Q2 earnings, then 10% tranches), you're looking at a 6-month programmatic unwind of insider/VC holdings. The article treats this as 'preventing a cliff'—it's actually distributing one. Also unexamined: at $1.8T valuation, SpaceX's revenue and profitability must justify that multiple, and the article provides zero financial metrics.
If SpaceX's growth trajectory justifies $1.8T (Starlink's addressable market alone could support massive valuations), then staggered selling by insiders actually signals confidence—they're not dumping at open. The float expansion genuinely helps index inclusion, which creates real demand beyond speculation.
"The non-traditional lockup structure is a mechanism to facilitate institutional exit liquidity at a peak valuation rather than a benefit for long-term retail holders."
The proposed $1.8 trillion valuation for SpaceX is aggressive, effectively pricing in a flawless execution of Starlink’s global broadband dominance and the successful integration of xAI. While the staggered lockup structure is framed as an innovation to manage float and Nasdaq-100 index inclusion, it is essentially a liquidity trap for retail investors. By incentivizing early selling through performance-based benchmarks, SpaceX is creating a 'controlled volatility' environment. If the Q2 earnings miss even slightly, the algorithmic sell-pressure from these staggered unlocks will be exacerbated by the lack of a traditional 180-day stability buffer. Investors should be wary of the valuation-to-revenue multiple, which likely exceeds 25x forward sales.
The staggered lockup may actually provide a more orderly price discovery process than the traditional 'cliff' expiration, where a massive, singular supply shock often triggers panic selling.
"The valuation relies on an aggressive, uncertain growth thesis across multiple segments and a built-in unlock cadence that may generate persistent supply and price volatility long before profitability is established."
SpaceX's unconventional lockup is the headline, but the real story is execution risk vs a sky-high valuation. A $1.8T IPO presumes multi-year revenue ramps across rockets, Starlink, and xAI with meaningful free cash flow far sooner than the narrative implies. The staggered unlocks remove a single cliff, yet they create a steady drip of new supply that can cap upside or ignite selling pressure after earnings. Starlink profitability, government contracts, and the AI spin-off add complexity and regulatory risk that the market may not fully price in at IPO. Moreover, the claim that float expansion will automatically boost Nasdaq-100 weightings ignores potential price sensitivity and tracking error for passive funds. In short, the upside depends on dubious level of earnings visibility.
Strong initial price action could lure momentum and passive buyers, potentially pushing the stock higher even if fundamentals are uncertain. If revenue and free cash flow beat expectations, the unlocks might not matter—until they do.
"Antitrust scrutiny from the xAI merger could delay Nasdaq inclusion and prolong selling pressure beyond the staggered unlocks."
The xAI merger at $1.8T embeds AI hype into an aerospace valuation, yet no one flagged how FTC or EU antitrust reviews on Musk's empire could stall index inclusion for months. This compounds Gemini's liquidity trap by extending the period where supply drips without corresponding demand from passive funds tracking the Nasdaq-100.
"Antitrust risk matters, but as a valuation headwind, not an index inclusion blocker—and that distinction changes the timeline for insider selling pressure."
Grok's FTC/EU antitrust angle is real, but overstated as a lockup blocker. Index inclusion doesn't require regulatory clearance—FTSE adds companies under investigation routinely. The actual risk: if antitrust scrutiny delays *profitability* (Starlink margins, xAI monetization), then staggered unlocks hit a stock that's already repriced lower. That's the cascade nobody named. Regulatory delay ≠ index delay, but both compress the window where insiders can exit at $1.8T multiples.
"The $1.8T valuation relies on an AI-infrastructure narrative that creates a conglomerate discount, complicating passive index absorption regardless of lockup mechanics."
Claude, you’re missing the primary incentive structure: the xAI merger creates a 'valuation floor' via AI-compute scarcity, not just aerospace revenue. If SpaceX integrates xAI’s compute into Starlink’s edge-networking, the $1.8T valuation isn't just rocket-math; it’s an infrastructure play. The real risk isn't just liquidity or antitrust—it's the 'conglomerate discount' that typically hits Musk-led entities. Passive funds hate complexity, and this structure forces them to buy a black box of AI and aerospace.
"Antitrust aside, the real risk is timing and monetization uncertainty around xAI, making staggered unlocks a perpetual supply drip that can cap upside."
Claude, I think you’re right that antitrust scrutiny doesn’t block index inclusion, but the real misses are timing and disclosure risk around xAI monetization. If profitability lags, the staggered unlocks create a relentless drip of supply into a fragile macro window (rate hikes, tech volatility). The AI compute scarcity thesis is fragile: compute pricing evolves, and a few big customers could renegotiate terms, eroding the floor you propose.
The panel is largely bearish on SpaceX's upcoming IPO, citing risks such as a high valuation, execution challenges, and potential regulatory hurdles that could impact the staggered unlock structure and index inclusion.
None explicitly stated by the panel.
The high valuation and potential earnings shortfall, which could lead to significant selling pressure due to the staggered unlock structure.