John Tinsman
Founder of AOT Invest, Portfolio Manager of AOTG/AOTS ETFs
SpaceX's valuation and upcoming share unlocks warrant caution, even after the stock rallied into October. About a trillion dollars of shares is unlocking, and VC funds and endowments mostly plan to recycle proceeds into venture or other equities now that SpaceX is public. Each unlock passing without much damage may breed complacency, which is when the biggest surprises hit; a rally through December would be even more surprising. The company itself is appealing. x.com x.com x.comÂ
SpaceX's price-to-sales ratio of about 70 is too high to buy, despite enormous growth drivers. Starlink's far lower costs than traditional telecom could let it dominate, space data centers are said to cost a fifth of those on Earth, and Starship may cut launch cost per kilo tenfold; together these could mean 10-20x more revenue, and a mature P/S near 20 would leave big upside. But it breaks two rules: never buy above 50x sales, and avoid unprofitable companies. The call remains undecided. x.comÂ
SpaceX faces a series of large share unlocks that could add selling supply. Another 911 million shares become eligible for sale tomorrow, followed by 328 million on Oct. 24, 319 million on Oct. 26, 1.3 billion in early November and 797 million in December; Elon's 6.4 billion shares become eligible in June 2027. x.comÂ
SpaceX faces near-term selling risk from an insider-share unlock despite a remarkably strong quarter. Tomorrow, 28% of its insider lockup pool, nearly 10% of all shares, becomes eligible for sale. Revenue reached $14.6 billion, up 161%, with $4.4 billion in net profit; $7.6 billion in AI revenue now exceeds Starlink and other connectivity revenue combined. x.comÂ
SpaceX looks set up for a big 2027 as its stock has handled earlier share unlocks well and the lockup schedule winds down. About 798 million shares become eligible for sale after the December 8 close; the June 2027 block is Musk's, and he is not selling. Other extended-investor tranches continue through 2027. x.comÂ
SpaceX's large share unlock magnified the selling-pressure risk. The biggest unlock amounted to 30% of its float. x.comÂ
SpaceX's unlock supply takes 2-3 months to absorb, setting up a December accumulation bottom. About 320M shares unlock Oct 24, up to 1.3B more after Q3 earnings, and a final tranche Dec 8. The float, not the business, is the problem: Q2 revenue grew 92% and Starlink has 12M subscribers. The bottom zone is $80-$90; $120-$140 bounces are traps. A $140 reclaim confirms a turn toward $300-$320 by April 2027; a daily close above $180 invalidates the setup. x.comÂ
SpaceX's unlock selling should clear by Monday, perhaps tomorrow, allowing a rally. If 200M of nearly 2B unlocked shares sell, 100M daily volume versus a 70M baseline takes seven to eight days to absorb them; $150 cannot break until then. Turnover since the 1.3B unlock should hit 700M tomorrow. Insanely bullish earnings and a super-low-risk bet on massive Q4 cash flows and the exceptional 2027 outlook make SpaceX the #1 rally pick once market tantrums end. x.com x.comÂ
SpaceX shares face a slow grind of unlock supply through December rather than one dump: August 6 is only the first of eight unlocks, and eligibility to sell jumps to 93% at Q3 earnings. Being eligible to sell differs from selling, since many holders bought years before the stock traded and will sell only if forced. The real test is whether demand absorbs October and Q3 earnings without cracking, so staying out until that stretch plays out. x.comÂ
SpaceX's post-earnings surge sets the stage for insiders to sell at better prices once the lockup expires, pointing to a major pullback below $100 around the August 6 share unlock. Insiders who bought at the IPO can already sell, and the stock was already falling after hours. x.com x.com x.comÂ
SpaceX's feared lockup selling never came, removing the main reason to wait until December to buy. The first lockup expiry passed without the immense selling many expected, and it rarely pays to bet against Elon Musk. x.comÂ
SpaceX's heavy spending and risk of further borrowing make its sharp stock rally hard to square with weakening debt and a huge lock-up expiration ahead. Bloomberg reports its bonds weakened and credit spreads widened despite earnings above estimates. Talk of a potential Tesla acquisition is also in the air. x.comÂ
