SpaceX Stock Falls 9% After $200B Unlock Despite $500 Target

SpaceX stock plunged 9.14% on October 22 as approximately $200 billion in restricted shares became eligible for sale. The decline followed stronger quarterly earnings and higher price targets from JPMorgan and Bank of America.

SPCX closed at $144.75, down from Wednesday’s $159.31. Meanwhile, Elon Musk confirmed that independent committees were examining a potential merger with Tesla.

SpaceX Stock Drops as $200B Share Unlock Adds Selling Pressure

SpaceX shares declined more than 5% on October 22 as approximately 1.3 billion restricted shares became eligible for trading. The release represents nearly 28% of the restricted-share pool established during the company’s June initial public offering.

The unlock allows employees and early investors to sell their holdings, although not every eligible shareholder must sell immediately. However, the release expands the potential supply of SPCX shares and comes after Wednesday’s post-earnings rally.

Another 328 million shares are scheduled to become tradable on October 26, adding to the company’s staggered release calendar. Meanwhile, Elon Musk’s holdings remain under separate restrictions that extend until June 2027.

The selling pressure comes after SpaceX’s stock plunged from its high in October following its third-quarter earnings. Even as it fell on Thursday, SpaceX reported revenue of $14.6 billion in the quarter, a 161% year-over-year increase.

In its earnings release Oct. 20, the company said that it achieved $4.4 billion in net income and $8.8 billion in adjusted EBITDA. Its Super Intelligence division generated $7.56 billion, and the Connectivity segment generated an additional $5.25 billion.

JPMorgan and BofA raise SpaceX stock price targets

Even after Thursday’s drop, Wall Street analysts have increased their SpaceX stock estimates, stemming from the latest unlocking. JPMorgan has maintained an Overweight rating on SPCX stock, and its price target remains at $500.

The bank has estimated the company could generate revenue of approximately $254 billion in 2027 due to the increased computing activity. By the end of this year, it will have 10 gigawatts of computing power and will generate roughly $400 billion a year in revenue.

However, JPMorgan admitted that its forecasts rely on the availability of funding, computer systems development, and continuing customer demand.

Meanwhile, BofA Securities raised its SpaceX stock price target from $235 to $275 while maintaining its Buy rating. Analyst Ronald Epstein cited the company’s quarterly performance and its expanding operations in artificial intelligence and satellite.

SpaceX’s Connectivity revenue increased 69% YoY, while its most recent mission for Starship deployed 26 operational Starlink V3 satellites. In addition to the development of Starlink Mobile’s network, the company has been steadily expanding its satellite operations.

Elon Musk Explores $3.7T Tesla-SpaceX Merger

Elon Musk is exploring a merger between Tesla and SpaceX, valued at about $3.7 trillion. The two firms have already formed special independent director committees to analyze possible structures for the transaction.

On SpaceX’s most recent earnings call in October, Musk said the agreement is a “good idea” but warned against assuming it would be done. The talks are still in their early stages, and it will take time for both parties to secure shareholder approval.

On Thursday, Bloomberg reported that advisers were considering several options, such as SpaceX buying Tesla or forming a holding company, with estimates putting the potential combination at around $3.5 trillion.

The discussions face further scrutiny because Musk holds ownership stakes in both companies and serves as their chief executive. According to reports, Elon Musk’s public support had raised concerns among people involved in the negotiations.

Meanwhile, the proposed transaction would require independent board reviews, regulatory consideration, and agreement on its financial structure. Neither company has announced final merger terms or a timetable for completing the discussions.

This article is for informational purposes only and does not constitute financial advice. Stock investments carry substantial volatility and potential capital losses. Readers should conduct independent research before making investment decisions.