SpaceX Kicks Off Yet Another Potential Fleecing of Retail Investors Today, Oct. 26
Key Points
Space Exploration Technologies shattered Wall Street’s initial public offering (IPO) records on June 12.
SpaceX is allowing most insiders (not including CEO Elon Musk) to sell their shares at several earnings- and time-based events.
We’re witnessing a dubious wealth transfer occur in real time.
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Elon Musk's Space Exploration Technologies (NASDAQ:SPCX), better known as SpaceX, has spent 2026 rewriting Wall Street's record books. Its June 12 initial public offering (IPO) raised $85.7 billion, including the underwriters' overallotment, and valued SpaceX at $1.77 trillion. Both are never-before-seen figures.
But SpaceX's history-making moments aren't always beneficial to its investors. While early investors have made a fortune, retail investors may pay the price for this success.
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Image source: Getty Images.
Yet another insider share-unlock event has arrived for SpaceX
Space Exploration Technologies' debut as a public company has hardly been conventional. In addition to pricing its shares several days before its June 12 debut, the company's prospectus outlined a staggered and accelerated share lockup period for early-release-eligible insiders.
Typically, companies going public prevent their insiders (high-ranking executives, board members, and early investors) from selling shares for 180 calendar days after the IPO. This ensures that insiders don't take advantage of retail investor euphoria early on.
However, SpaceX is allowing some of its insiders to sell their shares at several earnings- and time-based events through mid-December. CEO Musk, who's SpaceX's largest shareholder, is not among these early-release-eligible insiders.
Great look at the SpaceX shares unlock schedule as well as the potential passive buying schedule from @JSeyff @FrancisSharoon Depending on the early post-IPO returns, this could really play with and disperse the returns of "passive" funds (which is why there's arguably no such thing as passive). $SPCX
— Eric Balchunas (@EricBalchunas) May 28, 2026
Two business days after each of SpaceX's quarterly earnings reports, up to 911.5 million shares became eligible for sale. With the company unveiling its third-quarter operating results on Oct. 20, roughly 911.5 million shares became newly eligible for sale on Oct. 22.
Several time-based events also allow insiders to sell approximately 319 million shares each time. These events occur on calendar days 70, 90, 105, 120, 135, and 180. Given that calendar day 135 landed on a weekend (Oct. 24), today, Oct. 26, marks the release of another 319 million shares for sale by early-release-eligible insiders.
Image source: Getty Images.
We're witnessing a dubious wealth transfer in real time
But this ongoing and accelerated share lockup period for select insiders isn't the only dubious history being made by Musk's company.
When Space Exploration Technologies went public, it sold roughly 555.6 million shares. While this might sound like a lot, it represents less than 5% of SpaceX's outstanding shares (OS). Usually, private companies going public sell anywhere from 10% to 25% of their OS.
SpaceX selling such a small percentage of its OS created a favorable environment for its stock in the weeks after its IPO. Gaining fast-track entry into the Nasdaq-100, Russell 1000, and Russell 3000 meant that passive funds scooped up a significant portion of the company's float (tradable shares). This artificially low float initially buoyed SpaceX's stock.
However, with each earnings- and time-based insider share-unlock event, SpaceX's float is rapidly rising. Although this doesn't guarantee that insiders are cashing out, keep in mind that the overwhelming majority of these early investors haven't had any avenues to cash in their chips for years, if not a decade.
What we're effectively witnessing with each successive share-unlock event is the greatest wealth transfer in Wall Street's storied history, from retail investors to SpaceX's early-release-eligible insiders. Given the laundry list of unknowns surrounding SpaceX, including the sustainability of its operating model amid its enormous cash needs, it wouldn't be surprising to see insiders ramp up their selling and weigh on the company's stock.
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Sean Williams has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.
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