SpaceX Stock Rebounds 48% as $40B Debt Plan and Lockups Loom

A recovery that beat the skeptics

Four months after the largest initial public offering ever, SpaceX shares have recovered most of what they lost. For the first time since early July, the stock has spent a full week trading above $160. It is up 48% from its August 5 low. On Friday it gained as much as 3.6% more after the company bought a block of wireless spectrum that it says will let it offer "complete phone coverage in America."11 One summary of the move put the market value restored since August at more than $750 billion.16

The recovery is real. Two risks are already visible, though. SpaceX is reportedly seeking to raise about $40 billion in debt to buy Nvidia chips, and its largest remaining lockup expiration is due in November, alongside its next earnings report.1120 My view is that the August-to-October rebound answered one question: insiders are not rushing for the exits. It did not answer the one that matters more, which is whether this company's AI spending will produce returns that justify its valuation.

From record debut to all-time low

SpaceX priced its offering at $135 a share on June 11 and began trading on Nasdaq under the ticker SPCX the next day. The stock opened at $150 and closed at $160.95, which valued the company at roughly $2.1 trillion.5 The base deal sold about 555.6 million Class A shares for roughly $75 billion. After the underwriters fully exercised their overallotment option, the company had sold about 638.9 million shares, and net proceeds were reported at about $85.7 billion.310 That explains why headline proceeds vary from outlet to outlet: some cite the $75 billion base deal and others the larger total including the overallotment. By either measure, the deal dwarfed Saudi Aramco's 2019 record.8

The euphoria didn't last. Accounts of the peak also differ. Several put the intraday high at $225.64 on June 16, while others cite figures nearer $202 to $211, which likely reflects different measures such as closing versus intraday prices.18121 Either way, the decline was steep. The stock closed below its IPO price for the first time in mid-July.1814 It hit bottom after the company's first quarterly report in early August. Revenue and adjusted EBITDA beat forecasts, but capital spending jumped to $15.8 billion for the quarter from $7.7 billion in the first quarter. Investors sold off the shares by 13.6% in one session.12 CNN reported that the stock closed at $108.27 that day, an all-time closing low.13 The decline erased roughly $1.2 trillion in market value from the peak.16

The valuation debate never really went away. Before the listing, Aswath Damodaran estimated SpaceX's value at about $1.3 trillion. Morningstar put fair value at $780 billion. Michael Burry argued that nothing in the filing supported even a $1 trillion valuation.1 The prospectus assigned most of a claimed $28.5 trillion addressable market to artificial intelligence through xAI, which SpaceX absorbed in February. That made the IPO, in effect, a bet on AI economics as much as on rockets and Starlink.12

Why the lockups didn't break the stock

The most notable feature of SpaceX's market life so far is how its stock handled the lockup schedule. The company floated less than 5% of its shares at the IPO, far below the usual 10% to 25%.8 It also replaced the standard single 180-day lockup with staggered releases spread across about ten months.17 Ahead of the first unlock, academic research suggested lockup expirations push prices down about 1.5% on average. Morgan Stanley's Adam Jonas warned the shares could realistically fall to $100.17

That didn't happen. On August 6, up to 911.5 million shares became eligible for sale, more than doubling the tradable float, and the stock still rose about 6%.13 It rallied another 16% the next day, adding more than $327 billion in market value over two sessions.15 By August 10 it had closed back above the $135 offer price.14 Retail investors kept buying. One strategist said individual investors had been net buyers every day the stock had traded.13

Later releases had less effect. The Motley Fool counts six batches totaling nearly 2.3 billion shares since early August. The stock fell on three of the release days, and the last three release-day moves were each under 1.5%.20 Trading volume also suggests holders are not dumping shares. On September 24, about 73 million shares traded in total, roughly 22% of the 328.4 million that became eligible that day.20 Bloomberg's reporting quoted Laffer Tengler's Nancy Tengler, a shareholder, saying many insiders want to hold on. It also noted that the September Nasdaq 100 rebalancing raised SpaceX's index weight as its float grew, so index-tracking funds had to buy shares.11

That second point gets less attention than it should. More supply in a heavily indexed stock creates its own new buyers. The index mechanics helped absorb the unlocked shares that bears expected to swamp the market.11

Where the float numbers diverge

One inconsistency in the coverage matters for anyone sizing the remaining overhang. Bloomberg's account, republished by Moneycontrol, says the expirations lifted the float to about 33% of outstanding shares, up from roughly 7.5% at the IPO.11 The Motley Fool puts the current tradable share nearer 21% of 13.6 billion shares and projects about 40% by early December.20 The likely explanation is that "eligible to trade" and "actually in public hands" are being measured differently. Under either figure, a large amount of stock has yet to be unlocked. Musk's stake is locked until June 2027. CNN valued that stake at more than 40% of the company.1320

The real risks: November and the debt bill

The biggest single release is still ahead. Up to 1.3 billion more shares unlock on the second full trading day after SpaceX reports third-quarter results. The remaining pre-IPO holdings, excluding Musk's, follow at the 180-day mark in December.2019 One tracker lists December 9 as the next major expiry date.5 Market conditions have also changed. In August the stock was trading about 20% below the offer price, which likely kept holders from selling at a loss. It now sits about 21% above that price.20 Business Insider made a similar point during the August rally, noting that low prices may have discouraged selling.14 With the stock in profit, the motive to hold back is weaker.

Then there is the debt plan. A $40 billion raise to buy Nvidia chips would be one of the largest debt deals of the AI buildout, and it would come while long-dated Treasury yields sit near multi-decade highs.11 The market reacted quickly. The shares fell 6.6% over two sessions, and five-year credit default swaps on SpaceX debt reached a new high.11 The company is not short of cash. It sold $25 billion of investment-grade bonds in June and ended the second quarter with $100 billion in cash and marketable securities.18 It is still unprofitable on a net basis, with a 2025 net loss of about $4.9 billion that was largely driven by the AI segment.186

That combination explains the jump in credit spreads. Equity investors forgave the August capex surprise because Starlink's numbers were strong and the lockup fears turned out to be overdone. Lenders look at the risk differently. Adding tens of billions in borrowing to fund GPU purchases, at a company whose AI unit is losing billions, raises a harder question than whether insiders will sell.

Valuation: cheaper, not cheap

The bull case relies heavily on how much the multiple has compressed. Morgan Stanley's Jonas, who rates the stock a buy, says it trades at 111 times forward earnings, down from more than 540 times in July. He argues it looks cheaper still once growth is factored in.11 Other measures paint a less flattering picture. The Motley Fool noted that the stock traded above 100 times sales in early October.4 Even some investors who own it don't make a fundamental case: one market newsletter founder called owning SpaceX a leap of faith that has to be held for years.11

The broader stakes go beyond Musk's company. The New York Times observed that SpaceX's handling of its lockups will serve as a template for possible listings by Anthropic and OpenAI.17 So far, that template looks encouraging. A tiny float, staggered unlocks, fast index inclusion and heavy retail demand have produced a stock that survived its supply tests better than history suggested it would.1320

That is my reading. The rebound shows that SpaceX's IPO structure worked as intended. It doesn't show that the $2 trillion-plus valuation is correct. The next test arrives in November, when quarterly earnings, about 1.3 billion newly unlocked shares and a possible $40 billion bond deal could all land within the same few weeks.1120 So far, investors who bet against the lockups have been wrong. The next phase depends on the AI-spending concerns that first sent the stock to its August low.