As SpaceX Joins the Nasdaq 100, Giant Waves of Expiring Lock-Ups Could Soon Flood the Market

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SpaceX (SPCX) entered the Nasdaq 100 Index on Tuesday. Considered the bellwether index for tech stocks, the Nasdaq 100 comprises the 100 largest non-financial companies trading on the Nasdaq.

Its inclusion means that index-tracking investment funds must buy SpaceX stock regardless of its cost to accurately follow the index, arguably pushing up the company’s share price. Investors have been anticipating this move for weeks, ever since Nasdaq announced in March that mega-cap stocks like SpaceX would no longer need to wait at least three months after an initial public offering (“IPO”) before being considered for the tech index.

But the impact, for now, may be smaller than some investors anticipated.

As part of the announcement about changes to index inclusion rules, Nasdaq adjusted the weighting required for such low-float mega caps. Since SpaceX issued only about 5% of its stock in its IPO, funds won’t own as large a stake as is implied by the company’s $2 trillion market capitalization.

As a result, SpaceX will have a weighting of about 0.75% of the total index, according to Barron’s. With $800 billion in funds tracking the Nasdaq 100, funds will need to buy about $6 billion in stock, compared with about $96 billion of available stock, or about 6% of the stock’s float.

With SpaceX trading tens of millions of shares daily, fund trading may cause some hiccups in the stock, but investors have been anticipating this for some time and can sell shares to them.

What’s likely to become more problematic over the coming weeks, however, is the immense supply of SpaceX stock that could come to market. A series of stock lock-ups created as part of the IPO is set to expire in the coming months, allowing insiders to sell a flood of shares.

SpaceX’s Multistage Lock-Up Could Bring Waves of Insider Selling

While SpaceX’s quick inclusion in the Nasdaq 100 has gotten a lot of press, the company’s lock-up of insider shares could move the stock even more, though it’s likely to move downward. SpaceX sold only about 5% of its stock in its IPO, but multiples of that amount may soon hit the market.

A lock-up is a typical part of an IPO that prevents insiders from selling their shares for a certain period, allowing the market to set the stock’s price before insiders can take advantage.

This incentive helps prevent “pump-and-dump” schemes, where insiders hype up a stock to the moon (or Mars) and then cash out their holdings as credulous investors buy into the hype.

The lock-up reduces the conflict of interest between insiders – those who know the company best and have decided to sell it to the public – and outside investors. Companies going public often agree to a lock-up period of 180 days, so insiders can maintain “skin in the game” well after the IPO.

In the case of SpaceX, the lock-up period spans various stages through June 2027.

Here’s the timeline:

• June 12, 2026: About 5% of shares were floated in the IPO. (Total: 5%)
• August 11, 2026: About 20% more shares will unlock. (Total: 25%)
• October 25, 2026:Around 35% more shares will be unlocked. (Total: 60%)
• November 9, 2026:A further 28% of shares will unlock. (Total: 88%)
• June 13, 2027:The remaining 12% of shares will unlock. (Total: 100%)

The first major lock-up period is set to expire on August 11, with about 20% more of the stock to be unlocked. That is, with only about 5% of SpaceX stock currently floated on the market, the August date will see about four times more than this initial figure instantly unlocked. A further 35% of shares unlock two-and-a-half months later, followed by 28% or so more just two weeks after that.

In each of these periods, insiders could sell the unlocked stock – and likely will – but they’re not under any obligation to do so and may hold on if they think the stock can rise.

While funds tracking the Nasdaq 100 may initially buy stock to accurately follow the index, their purchases are likely to wane just as more shares begin to hit the market.

So, SpaceX stock may see wave after wave of insider selling over the next four months, as the first few lock-ups expire and insiders look to cash out. The company’s absolutely massive valuation – or overvaluation, says analyst Whitney Tilson – may lead insiders to sell fast.

SpaceX’s Valuation Remains Sky-High. What’s Next for the Stock?

After rising quickly in the days following the IPO, SpaceX’s stock has come back down significantly. The stock peaked at more than $225 per share, and now trades around $150, a drop of about one-third. Despite the plunge, SpaceX’s $2 trillion market capitalization makes the stock look quite pricey.

A range of disinterested analysts – those who are not going to generate business by producing favorable ratings for SpaceX, unlike investment banks – came out with blistering analyses of SpaceX’s valuation before the IPO, as I noted in a recent article:

• Research service Morningstar pegged SpaceX’s fair value at $780 billion, implying 61% downside from its recent price.

• Aswath Damodaran, finance professor at NYU’s Stern School of Business, values the stock at $1.25 trillion to $1.35 trillion, suggesting a downside of 33% to 38%.

• Danish pension fund AkademikerPension reckons SpaceX is not worth more than $1 trillion, but blacklisted the company for its “catastrophic governance structure.”

How did SpaceX get so expensive, then? Through some clever maneuvers on the part of Musk and SpaceX, culminating in the stock being included in the Nasdaq 100 soon after the IPO.

Musk used SpaceX’s cash to buy back its own stock in a series of tender offers over the past two years, all while setting the stock valuation at an increasingly higher price:

• July 2024: A $210 billion valuation (as part of a tender offer)
• December 2024: A $350 billion valuation, based on a tender offer for $1.25 billion in stock (of which SpaceX bought $500 million worth)
• July 2025: A $400 billion valuation, based on a tender offer for $1 billion in stock (of which SpaceX bought an unspecified amount)
• December 2025: An approximately $800 billion valuation, based on a tender offer in which the company and other investors would buy $2.56 billion in stock from insiders
• February 2026: A merger between SpaceX and Musk-led startup xAI (a combo of social media platform X in March 2025) valued the new company at $1.25 trillion.

More recently, Musk has been talking up the possibility that SpaceX could generate $1 trillion in sales by 2030. Of course, Musk heavily hedged his bets when he announced on X, “And I would be surprised if revenue is not greater than $1T in 2031.” That’s less a prediction than a “plausibly deniable” speculation that is meant to get investors excited about the stock.

But don’t believe for one second that SpaceX has any chance of hitting $1 trillion in revenue on any reasonable timeline. Musk has a long-term track record of promising things he has no ability to deliver – anyone up for a ride in the self-driving car Musk has been promising for more than a decade?

Musk’s track record of broken promises – to put it in the most legally defensible terms – is why investing in Musk-related stocks can be a gamble. At the same time, investors should be careful about short-selling any Musk stocks, given that a highly irrational market can always become even more irrational.

Regards,

James Royal, PhD

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