Dear Reader,
Good morning.
Simmy Adelman here with Behind the Markets.
On Wednesday, SpaceX fell below its $135 IPO price for the first time.
The stock touched $132.15 intraday before recovering to close right at $135.27.
For anyone who's been following along, this is not a surprise.
It's exactly what Dylan told you to expect.
What Dylan Said in June
The week SpaceX went public, Dylan walked you through 80 years of research on how IPOs actually trade after listing.
Two numbers stand out from that research.
First: 90% of IPOs eventually trade below their first day low.
SpaceX's first day low was $150 — right where it opened.
That is the floor the research says to watch.
Second: the pullback from the post-IPO high is typically around 20%, but in periods of extreme volatility it can reach 50%.
SpaceX hit $225.64 on June 16.
20% below that is $180.
50% below that is $112.
We are now at $135 and falling.
Dylan's exact words: "If you didn't get shares in the IPO and you're sitting there feeling like you missed it — you almost certainly haven't."
He was right.
Why It's Falling
There are three things driving this.
The first is valuation reality.
SpaceX trades at nearly 50 times estimated 2026 revenue.
It is not projected to be profitable this year.
Starlink is genuinely excellent — 10.3 million subscribers and $1.2 billion in operating profit in Q1 alone.
But the overall company posted a $1.94 billion operating loss in Q1 due to $10.1 billion in capital expenditures.
The IPO hype covered all of that up for about a month.
Now the market is doing what it always does.
It's reading the actual numbers.
The second reason is the thin float.
Only about 4% of SpaceX's total shares are publicly tradable.
That means a relatively small amount of selling pressure can move the stock dramatically in either direction.
On the way up it felt like magic.
On the way down it feels like a trapdoor.
The third reason — and this is the most important one going forward — is the lock-up expiration.
The Lock-Up Cliff
Here's something every SpaceX shareholder needs to understand right now.
When a company goes public, insiders — employees, early investors, venture capital firms — are not allowed to sell their shares immediately.
They have to wait.
This is called a lock-up period.
SpaceX structured its lock-up in stages.
The first major unlock happens on the second trading day after SpaceX reports its first quarterly earnings as a public company — expected in early August.
At that point, approximately 911.5 million shares held by insiders become eligible for sale.
To put that in perspective: the entire public float right now is worth roughly $86 billion.
Those insider shares are worth roughly $123 billion.
In other words, shares worth more than the entire current public float are about to become available to sell.
That is a significant supply event.
It doesn't mean everyone sells.
But it means the potential supply hitting the market in August is enormous.
And markets don't like uncertainty about supply.
What Comes Next
Dylan's research said to wait for the base to form.
To not chase the opening pop.
To wait for the stock to break out of its base on heavy volume before entering.
We are still in that process.
The stock has already broken below the $150 first day low — the floor the research said 90% of IPOs eventually breach.
That box has been checked.
The next level to watch comes from the pullback framework.
SpaceX peaked at $225.64 on June 16th.
A 50% pullback from that high puts the stock at $112.
That is the next significant level on the downside if selling pressure continues.
The lock-up expiration in August will be the real test.
When $123 billion worth of insider shares become eligible for sale, the market will finally find out what this stock is actually worth without the IPO hype holding it up.
That is when the base truly forms.
And that is when patient investors find out if there's a real entry point here.
Dylan's instructions were clear: wait for the breakout on heavy volume.
We are not there yet.
Patience is not weakness.
It's the whole strategy.
We'll keep watching it closely and report back as things develop.
Have a wonderful weekend.
I'll see you on Monday.
All the best,
Simmy Adelman, Editor-in-Chief
Behind the Markets
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Written by Dylan Jovine