Quick overview
- SpaceX is set for a pivotal week with its first earnings call post-IPO on August 4, amid a 50% drop from its listing high.
- Investors are closely watching metrics such as Starlink subscriber growth and revenue, as well as the impact of a $100 billion lockup expiring on August 6.
- Speculation about a potential Tesla-SpaceX merger adds another layer of interest, with a 74% chance predicted by Kalshi for a merger by May 2027.
- Technical analysis shows SpaceX is near key support levels, with bearish sentiment prevailing unless the stock rallies above $119.34.
SpaceX (NASDAQ: SPCX) is approaching one of its most critical weeks since its landmark IPO after a 50% drop from its listing high. Investors brace for the first public earnings on August 4, followed by a lockup that will release over $100 billion in shares just two days later. Kalshi has a 74% chance of a Tesla-SpaceX merger by May 2027, and Reuters claims SpaceX is one of the most sought after post-IPO companies by investors, especially to gain insights of Starlink’s growth and valuation.
Having easily claimed the largest IPO in US history, SpaceX has quickly transformed from one of the hottest, and most profitable stocks, to one of the most disappointing. The coming week has the potential to determine the scope of the losses, and possibly, the largest incentive for investors in the coming week. Expect earnings, insider-share unlocks and, of course, more of Elon Musk.
Week Ahead: Elon Musk Faces Two Major Catalysts
The first major event occurs on August 4 when SpaceX holds its first earnings call post-IP. Wall Street has high expectations, predicting SpaceX will report approximately $6.9 billion in revenue, a roughly 46% increase from the $4.7 billion reported for Q1.
The following metrics will garner heightened scrutiny:
- Starlink subscriber growth
- Average revenue per user (ARPU)
- AI segment performance
- Falcon launch activity
- Starship development
- Capital expenditure
- Free cash flow
The Motley Fool said this earning release will indicate if investors are willing to buy after selling at a loss when the stock sharply dropped post-IPO.
Thursday’s $100 Billion Lockup Could Drive Volatility
Scheduled for only two days after the earnings, on August 6, the stock of SpaceX will be available for sale to the public as now the approximately 911.5 million shares of early employees are eligible for sale. Currently, the stock sale is valued at $100 Billion.
Even though, a lock up expiring does not generally indicate an immediate stock sale, it does cause a significant increase in the available stock supply and typically results in a large increase in stock price variance.
The Motley Fool has even said that there is focus on the decision risk SpaceX insiders will begin to sell off stock after the extremely unpredictable market period SpaceX has experienced in its first tradeable public company listing offerings.
Starlink Continues Justifying the Investment
Starlink is the foundation on which long-term SpaceX fundamentals rest even after recent share-price adjustments. By the end of the first quarter of 2023, there were around 10.3 million Starlink subscribers, spanning 160 countries and supported by 9,600+ operational satellites.
Starlink is the principal operational profitable segment and allows funds to be allocated to Starship, satellite deployments, and the company’s investments into artificial intelligence systems and infrastructure.
For fiscal year 2025, SpaceX reported total revenue of $18.7 billion. Of that revenue, $11.4 billion was attributed to Subsidiary Revenue – Connectivity. Evidence of continued Starlink investments and possible revenue reinvestments is what investors are hoping for.
Tesla Merger Speculation Adds Another Wild Card
Investors are also paying attention to possible speculation and talk of the merger of Tesla and SpaceX. On the prediction and betting marketplace, there is believed to be a 74% chance that a merger will occur by May 2027. So far, there has been no evidence that a merger, or any other type of deal for that matter, is planned, and it is believed that the prediction is solely market speculation. Elon Musk leading both companies has meant that speculation has occurred, and that has led to an increase in retail investors in front of the earnings calls.
SpaceX Technical Analysis: Bears Still Control the Trend
SpaceX is drawing near a key support level for the descending channel that bears have been controlling with Starship selling in a defined fashion. Starship is currently trading near $108.4 with support at $107.29. The 50-period EMA at $120.2 and 100-period at $135.1 continue a downward slope, and bearish sentiment has yet to be realized even though the RSI sits near 37. A rally above $119.34 would likely signal the buyers’ return.
Until then, any upward price action will be interpreted as a correction.
Resistance Levels: $119.34, $128.62, $136.40
Support Levels: $107.29, $100.70, $94.95
Trade Plan
Buy: Above $119.34 (confirmation required)
Targets: $128.62 and then $136.40
Risk: $107.29 (Stop Loss)
If price stays above $107.29 we could see a rally after the earnings release. Price dipping below that support would increase the potential for a drop to $100.70.
Frequently Asked Questions
Why is SpaceX stock down 50%?
SpaceX stock is undergoing a correction after a post-IPO price increase as investors speculate the valuation of the stock just before the Earnings Call and after a period of the Insider Lockup. Reuters claims that this stock is one of the most highly anticipated stocks post-IPO. (Link Reuters)
What will drive SpaceX stock from earnings?
Investors will be trying to piece together a valuation from multiple different lines of the earnings release including revenue, Starlink subscribers and average revenue per user, how much money and resources have been allocated to AI and the Starship project, as well as Free Cash Flow and guidance.
Why is August 6 a significant date?
This will be the first expiration of the insider lockup and will increase the shares available in the public markets, boosting volatility.
Arslan Ali Butt
Lead Markets Analyst – Multi-Asset (FX, Commodities, Crypto)
Arslan Ali Butt serves as the Lead Commodities and Indices Analyst, bringing a wealth of expertise to the field. With an MBA in Behavioral Finance and active progress towards a Ph.D., Arslan possesses a deep understanding of market dynamics.
His professional journey includes a significant role as a senior analyst at a leading brokerage firm, complementing his extensive experience as a market analyst and day trader. Adept in educating others, Arslan has a commendable track record as an instructor and public speaker.
His incisive analyses, particularly within the realms of cryptocurrency and forex markets, are showcased across esteemed financial publications such as ForexCrunch, InsideBitcoins, and EconomyWatch, solidifying his reputation in the financial community.
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