SpaceX Stock Slips as Share Unlock Hits the Market

SpaceX’s stock took a significant hit on Thursday as the company’s latest share unlock event saw 319 million shares become eligible for trading. This marked the 70th day of a staggered lockup period, which is expected to release around 88% of the company’s 13 billion shares through 2027.

The stock’s value fell by nearly 5% in early trade, dropping below its initial public offering (IPO) price of $135. Despite this, the stock has shown resilience in the face of previous share unlocks, including one that occurred earlier this month. On August 6, up to 911.5 million shares became tradable, but the stock absorbed the shock and rose by 6%.

The latest share unlock event is just the beginning of a series of larger supply tests that are still to come. A 1.3 billion-share tranche is set to unlock around SpaceX’s third-quarter earnings in early November, followed by the 180-day expiry in December. CEO Elon Musk’s 6.42 billion shares remain locked until June 2027.

A Potential Acquisition and the Future of AI

SpaceX has been making waves in the AI space with its recent acquisition of Cursor, a company that specializes in AI coding. The deal, which was worth $60 billion, has been met with optimism from Wall Street analysts, including Deutsche Bank’s Edison Yu. In a recent report, Yu highlighted the benefits of the acquisition, including instance presence across blue-chip enterprises, access to proprietary data, and the potential for vertically integrating the application layer with a frontier model.

However, the company’s future plans in the AI space may be uncertain, as reports suggest that SpaceX was in talks to acquire Cognition, an AI company that features a coding agent called Devin. CEO Elon Musk denied the report, stating that the company had only discussed ensuring that Grok works well for Cognition’s needs.

The acquisition of Cognition would have marked a significant expansion of SpaceX’s AI capabilities, but the company’s focus on its existing AI initiatives remains unclear. As the company continues to navigate the complex landscape of AI development, one thing is certain: the future of SpaceX is closely tied to its ability to innovate and adapt in this rapidly evolving field.

Wall Street Analysts Remain Bullish

Despite the challenges posed by the latest share unlock event, Wall Street analysts remain optimistic about SpaceX’s future prospects. Deutsche Bank’s Edison Yu has upgraded the company’s full-year earnings per share (EPS) estimate by 11% and its overall revenue projection by 1%. While the stock’s current value may be below its IPO price, the long-term potential of the company remains strong.