SpaceX's 35% Bounce After First Lockup Proved Bears Wrong—Now the Second Expiration Tests the Recovery

The Quick Take

• SpaceX shares bounced 35% off their lows after the first lockup expiration proved to be far less disruptive than bears feared, as supply absorption was stronger than anticipated in the secondary market.
• A second lockup expiration is now arriving, testing whether the recovery thesis holds or whether cumulative supply from two successive events overwhelms secondary market demand.
• The biggest challenge for SpaceX's private market valuation may be the law of supply and demand: each lockup adds incremental float to a market with finite institutional buyer capacity.

SpaceX's first lockup expiration was widely anticipated to trigger a secondary market sell-off as early investors, employees, and institutional holders gained liquidity. The actual outcome confounded the bears: the 35% recovery from lows suggests that institutional demand for SpaceX shares—accessible only via secondary platforms at substantial friction costs—is deep enough to absorb the initial wave of supply without a sustained price dislocation. This outcome matters not just for SpaceX holders but for the broader private technology market, where lockup dynamics are a persistent source of uncertainty for investors in high-profile pre-IPO companies.

The second lockup expiration introduces a more complex test. Whereas the first lockup confirmed that demand could absorb the initial supply wave, the second tests whether cumulative supply from two successive events exceeds the available institutional buyer pool. The key variable is the overlap between sellers: if a significant portion of the second lockup cohort consists of holders who chose not to sell in the first window, they represent genuinely new supply rather than previously-absorbed overhang. Understanding whether the second wave is net-new or previously-delayed determines whether the market faces a technical supply event or a more fundamental demand constraint.

The supply/demand dynamic over the next quarter will be the primary price signal for how SpaceX's implied valuation fares as it approaches eventual public listing. Operational momentum remains a supportive factor: Starship launch cadence, government contract awards from NASA and the Department of Defense, and Starlink subscriber growth all contribute to the bull case for valuation maintenance through the lockup period. However, private markets differ from public ones in a critical way—institutional liquidity providers must commit capital with no guaranteed exit timeline, which imposes a higher discount rate on incremental supply absorption than would apply in a listed environment.

Synthesized from 2 sources.