SpaceX selloff an ominous sign as lockup expiry looms

The dip in SpaceX's shares below its blockbuster IPO price of $135 a share is an ominous sign for Elon Musk's internet and rocket company as it faces more potential volatility in early August, when the number of shares available for trading on the Nasdaq stands to increase significantly.



The company's stock on Wednesday dipped as low as $132.15 before closing at $135.27. It has now tumbled 33% from its record close in the immediate days after the public sale raised a record $75 billion on June 11.



Even after that steep decline, it remains one of Wall Street's most valuable companies with a market capitalization of roughly $1.8 trillion.



While SpaceX's IPO was the largest in U.S. history, it made less than 5% of its shares available for stock market trading, making investors fight for a scarce number of shares that helped value the company at $2.1 trillion after its first day on the Nasdaq. So-called "lockup" restrictions on insiders will lift in coming months, potentially flooding the market with additional shares.



"We think at this level, it's relatively safe to at least be involved from a trading perspective," said Jay Hatfield, CEO of Infrastructure Capital Advisors in New York. "We won't overweight it because they do have the lockup coming."