SpaceX Stock Is Down Nearly 50% From Its High — Here’s Why It Could Get Worse Later This Week

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SpaceX stock is about to get a shock that could bring it back down to earth. On Thursday, the company’s first stock “lockup” expires, meaning employees and early investors who’ve been barred from selling their shares since the IPO can finally cash out.

Here’s why that matters: 912 million shares, more than double what’s currently tradable, become available all at once, according to the New York Times. Lockups exist to prevent a flood of insider selling from tanking a stock right after it goes public. Once they expire, that flood often happens anyway, and prices tend to drop.

SpaceX’s stock has already fallen nearly 50% from its post-IPO high, a slide that recently cost Elon Musk his trillionaire status. The company went public in June with the biggest IPO in history, raising $85.7 billion and briefly touching a $2 trillion valuation. Since then, skepticism has crept in. Nearly $25 billion worth of SpaceX stock, more than a third of its tradable shares, is currently held by short sellers betting the price keeps falling.

One Morgan Stanley analyst says the stock could realistically drop to $100, even as he remains bullish long-term. For a company that made history two months ago, this could be a rough landing.