The countdown to SpaceX’s inaugural quarterly report as a public company is running alongside a far more ominous clock. On August 4, the rocket and satellite giant will release its first set of numbers since its June debut on the Nasdaq, but the real pressure point arrives just two days later. That’s when a lock-up agreement covering 911.5 million insider shares expires, flooding a market already rattled by a 44% plunge from the stock’s all-time high.
The shares touched a fresh post-IPO low of roughly $110.85 on Thursday before recovering to close at $103.96 in European trading, a 2.89% gain that did little to alter the broader trajectory. Over the past 30 days, the stock has shed 23.67% of its value, and the relative strength index of 35.3 suggests the selling has pushed the name into technically oversold territory. From the record close of $225.64 on June 23 — just 11 days after the IPO priced at $135 — the market capitalization has shrunk from $2.639 trillion to roughly $1.479 trillion, wiping out more than a trillion dollars in paper wealth. Elon Musk alone is estimated to have lost $35.2 billion on that single session.
Short Sellers Are Winning Big
The lock-up expiry is the primary reason bears have been piling in. Currently, only about 4.9% of SpaceX’s 13.2 billion outstanding shares trade freely. Once the first tranche of restricted stock becomes tradable on August 6, the free float will jump to roughly 12%. By December, as additional lock-ups unwind, the float could expand to as many as 5.33 billion shares. That looming supply has drawn short sellers like moths to a flame.
The percentage of shares sold short relative to the free float has climbed to an estimated 56%, representing roughly 360 million shares on loan. In dollar terms, the short position is worth about $25 billion, and the bears have already racked up $15.5 billion in mark-to-market profits. Musk has publicly warned that companies with significant short exposure against them have a very low probability of survival — a pointed message to those betting against his firm.
HSBC initiated coverage with a Hold rating and a $118.24 price target, explicitly citing the lock-up overhang as a headwind. JPMorgan analysts, meanwhile, have flagged regulatory obstacles to a potential merger with Tesla, particularly regarding China — a scenario Musk neither confirmed nor ruled out during Tesla’s recent earnings call.
A Growth Story With Deep Losses
The financials disclosed in the IPO prospectus reveal a company growing fast but burning cash even faster. For the full year 2025, SpaceX reported revenue of $18.7 billion, an operating loss of $2.6 billion, and capital expenditures of $21 billion. Starlink, the satellite internet division, grew 50% year-over-year and remains the company’s primary growth engine.
The first quarter of 2026 showed continued strain: revenue of $4.69 billion was overshadowed by a net loss of $4.28 billion and an operating loss of $1.94 billion. Financing costs are adding to the pressure. A SpaceX bond maturing in 2056 now yields 7.6%, a level typically associated with speculative-grade credit. The company’s 6.65% notes due 2056 have fallen from 97 cents on the dollar to 87.6 cents.
Should investors sell immediately? Or is it worth buying SpaceX?
Starship Delays Complicate the Picture
Operationally, the narrative has been no smoother. The 13th test flight of the Starship system, originally scheduled for July 23 from Starbase in Texas, was postponed due to unfavorable weather conditions that would have prevented ground-based observation of the heat shield. A previous attempt on July 16 was aborted after engine ignition failures, forcing the replacement of two Raptor engines. The mission is designed to carry 20 simulated Starlink V3 satellites, six of which are equipped with cameras to document the heat shield under high dynamic pressure during ascent.
Bloomberg has reported that SpaceX is now turning down commercial Falcon 9 contracts beyond 2028 and halting rideshare reservations in order to funnel resources entirely into Starship. An analyst at Futurum warned that this strategy could create a gap in launch capacity if Starship is not commercially viable by then, potentially benefiting competitors such as Rocket Lab. U.S. government sources indicate SpaceX is already more than a year behind schedule for the Artemis lunar landing.
The Tesla Connection
Speculation about a tie-up between Musk’s two flagship companies has only intensified. During Tesla’s recent earnings call, Musk was asked about a potential merger and replied that “you can’t discuss the combination of companies on an earnings call” — it would have to follow “the proper process.” Gene Munster of Deepwater Asset Management raised his probability estimate for a merger to 90%, up from 80%.
Notably, Tesla’s second-quarter GAAP net income of $1.114 billion included an unrealized gain of $1.005 billion on the SpaceX stake Tesla acquired earlier this year for roughly $2.002 billion. That stake is less than 1% of SpaceX, but without that gain, Tesla’s operating profit would have been significantly lower. RBC highlighted in its analysis the growing importance of the SpaceX relationship to Tesla’s valuation.
What Comes Next
For now, the August 4 earnings report is the most immediate catalyst. It will be the first time investors get a full look at SpaceX’s books as a public company, and the market will be parsing whether Starlink’s growth trajectory can offset the operational losses and the looming share overhang. A separate lock-up condition — releasing an additional 10% of shares if the stock trades above $175 for five of ten trading days around the earnings date — appears increasingly out of reach at current levels.
Musk himself holds roughly 40% of the equity and over 80% of the voting rights, and his personal shares are subject to a separate one-year lock-up. That gives him time, but it does little to calm the nerves of investors watching the stock shed half its value in six weeks.
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