The Retail Investor Fleecing Continues: Up to $48 Billion in SpaceX Insider Selling Pressure Can Hit the Tape Next Week
Key Points
Space Exploration Technologies’ (SpaceX) initial public offering (IPO) shattered Wall Street records.
Another 319 million early-release-eligible insider shares will be available for sale on Sept. 24.
SpaceX’s staggered share-unlock events, coupled with its low float, have retail investors set up to fail.
On June 12, Elon Musk's artificial intelligence and space infrastructure conglomerate, Space Exploration Technologies (better known as SpaceX) (NASDAQ:SPCX), rewrote Wall Street's record books. The company's initial public offering (IPO) raised $85.7 billion, including the underwriters' overallotment, nearly tripling the $29.4 billion raised by Saudi Aramco's IPO in December 2019.
SpaceX was also the catalyst that led committees to rewrite the rules governing index inclusion. Shortly after its debut, it was fast-tracked into the Nasdaq-100, Russell 1000, and Russell 3000.
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But Musk's company is making stock market history in dubious ways, as well.
Image source: Getty Images.
More insider shares are becoming eligible for sale
Traditionally, when a private company goes public, it establishes a share-unlock schedule that prevents insiders from selling for the first 180 calendar days and taking advantage of retail investor euphoria. "Insiders" are high-ranking executives, board members, and early investors who may possess non-public information.
SpaceX flouted convention throughout the IPO process, including with its share lockup schedule. Although CEO Elon Musk is prohibited from selling any of his shares for 366 calendar days, a sizable percentage of early-release-eligible shares can be sold to retail investors well before the 180-calendar-day mark.
Great look at the SpaceX shares unlock schedule as well as the potential passive buying schedule from @JSeyff @FrancisSharoon Depending on the early post-IPO returns, this could really play with and disperse the returns of "passive" funds (which is why there's arguably no such… pic.twitter.com/KOuEkJlngF
— Eric Balchunas (@EricBalchunas) May 28, 2026
According to Space Exploration Technologies' lengthy prospectus, the first share-unlock milestone occurred two days after the company's first quarterly report as a public company. On Aug. 6, approximately 911.5 million shares became eligible for sale by insiders.
Several time-based milestones also allow eligible insiders to sell some of their shares. On calendar days 70 (Aug. 20) and 90 (Sept. 9), approximately 319 million additional insider shares became eligible for sale. Additional 319-million-share milestones are set for calendar days 105, 120, 135, and 180.
The company's 105th calendar day is Sept. 24. That means up to $48.2 billion in insider selling pressure can hit the tape next week.
Image source: Getty Images.
Ongoing share lockups are complicated by SpaceX's historically low float
However, it's not just the repeated share-unlock events over the first six months that are problematic for SpaceX's retail investors. The company's low float (i.e., tradable shares) also foots some of the blame.
When companies go public, they typically sell between 10% and 25% of their outstanding shares. Musk's Space Exploration Technologies priced approximately 555.6 million shares of its IPO at $135 each. Though this might sound like a sizable lot of shares, it represents less than 5% of the company's outstanding shares.
As noted, SpaceX was granted accelerated entry into several major stock indexes, leading to a substantial number of its IPO shares being gobbled up by passive funds. A relatively small float likely played a role in buoying its share price.
BREAKING: A total of 911,500,000 shares of SpaceX, $SPCX, held by employees and early investors, become eligible to trade tomorrow.
— The Kobeissi Letter (@KobeissiLetter) August 5, 2026
That's ~43% more than the 638,900,000 shares issued at IPO.
SpaceX's free float is set to increase from 4.9% to 11.8% of outstanding shares.
With each successive early-eligible-release share-unlock event, the company's float expands, meaning the positive effects of passive-fund purchases are dwindling.
More importantly, each share-lockup milestone represents an opportunity for the greatest wealth transfer in stock market history to take place, from retail investors to SpaceX insiders.
After years without the ability to sell, early-release-eligible insiders are now able to dispose of their stakes in an unproven, cash-burning, trillion-dollar company. It's the ultimate fleecing of retail investors, and it'll be occurring through mid-December.
Sean Williams has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.