SpaceX shares are still facing challenges near record lows as investors prepare for the company’s first earnings report following its IPO, alongside the upcoming release of 911.5 million insider shares.
Summary
- On July 31, SpaceX shares fell 3.41% to $108, marking their lowest closing price since going public in June.
- SPCX dropped by around 36% in July, down from the price of $171 on July 1.
- Approximately 911.5 million insider shares will become tradable starting August 6.
- One-hour charts show immediate support at $107.10, with resistance expected at around $121.09.
SpaceX Stock Continues Post-IPO Decline
On July 31, SpaceX shares closed at $108 after a 3.41% drop, reflecting a significant decline of about 36% from July 1’s price of $171. This downturn marks the lowest closing price since the company’s IPO on June 12.
SPCX has now decreased by over 50% from its peak of $225 reached on June 16. This ongoing decline raises concerns about the potential for a dip below $100 as two pivotal events approach.
SpaceX is scheduled to release its inaugural quarterly results as a public company on August 4. Following this, the restrictions on 911.5 million insider shares are expected to be lifted on August 6, allowing those shareholders to sell their stock.
These developments could result in significant price fluctuations as investors evaluate operational performance while also considering the potential increase in stock supply.
Earnings and Short Sellers Driving Market Trends
Wall Street predicts that SpaceX will report quarterly revenues between $6.72 billion and $6.9 billion. Exceeding these expectations could help alleviate concerns surrounding the company’s valuation and encourage buyers back into the market after four consecutive weeks of losses.
However, a revenue shortfall could lead to adverse effects, particularly given the lack of a solid support level for the stock. Additionally, traders will be closely watching for updates regarding Starlink, launch operations, and the expansion of the data-center business.
Short selling has intensified the pressure on the stock. Data from S3 Partners indicates that around 219.3 million shares have been shorted, making up approximately 39% of the shares available to the public.
This substantial short position suggests that short sellers could continue to profit if SPCX declines further. However, unexpectedly strong earnings could prompt some traders to cover their positions, potentially leading to a short-term rebound.
Bernstein recently reaffirmed an “outperform” rating with a price target of $239 after SpaceX completed its 13th Starship test flight. Furthermore, William Blair has raised its earnings-per-share estimate from $8.20 to $8.60, pointing to growth in the company’s data-center operations.
Upcoming Share Unlock Poses Selling Risks
The unlock date on August 6 presents a significant downside risk, as it will allow 911.5 million insider shares to be sold. With the current price around $108, these shares would have a market value of nearly $98.4 billion, although eligibility doesn’t ensure that all holders will choose to sell.
Sam Pierson, research director at S3 Partners, noted that this influx of shares could lessen the impact of a positive earnings report.
“Nothing announced in the earnings report will counterbalance the volume of unlocked shares hitting the market,” Pierson stated.
The actual amount sold will depend on insider decisions, liquidity, and market demand. Nevertheless, the sheer volume of shares unlocking might dissuade investors from buying ahead of August 6, especially with high short interest persisting.
For U.S. investors, both critical events occur within the same trading week, which could amplify volatility, widen intraday price variations, and make execution prices less certain as the earnings release and unlock date approach.
Testing Support at $107.10 for SpaceX Stock
The one-hour SPCX chart shows the stock trading around $108.39, within a broad descending channel. The price is currently testing the $107.10 Fibonacci level, which serves as immediate support.
A confirmed break below $107.10 would eliminate the last marked retracement support, potentially exposing the crucial psychological level of $100, followed by the lower boundary of the descending channel near $97.
Trend indicators currently favor sellers, with Aroon Down at 92.86% and Aroon Up at 7.14%, indicating that recent lows are occurring significantly more often than recent highs.
The Awesome Oscillator remains in negative territory at -3.98, as indicated by red histogram bars, signaling continued bearish momentum as SPCX approaches the lower end of its recent price range.
The initial upside resistance is found at the 78.6% Fibonacci retracement level of $121.09. Recovery above this level would weaken the immediate bearish stance yet won’t reverse the prevailing downtrend.
Additional resistance levels can be found at $132.08 (corresponding to the 61.8% retracement) and $139.80 (at the 50% level). For SPCX to achieve a more sustainable recovery, it must move above the descending channel and hold these levels.
Future Outlook for SPCX
The short-term direction of the stock appears to depend on whether earnings can effectively manage the supply increase from the share unlock. If revenues exceed expectations and guidance remains strong, SPCX could maintain the $107.10 support and challenge $121.09.
Conversely, a failure to hold above $107.10 would heighten the chances of a decline below $100. On the other hand, sustained movement above $121.09 would offer significant technical validation that selling pressure is easing.
With earnings release scheduled for August 4 and the stock unlock anticipated on August 6, traders face two critical events poised to trigger sharp price movements. Until SPCX can reclaim nearby resistance, its descending trend and negative momentum indicators suggest that sellers remain in control.
