Aug 6 (Reuters) – SpaceX shares fell on Thursday, as investors braced for a potential bout of insider stock sales that could heap fresh pressure on a company already enduring a bumpy ride since listing.
The shares were last trading down 1.3% at $106.45.
When a company goes public, certain shareholders – typically executives, employees and early investors – are often restricted from selling their shares for up to 180 days, to limit volatility and provide some long-term support to the stock.
SpaceX, however, had an unusual arrangement under which up to 20% of the restricted shares could be sold starting Thursday, the second trading day after its second-quarter earnings release.
Analysts worry that the new supply of shares could exacerbate pressure on the stock. A lock-up expiration does not require insiders to sell, but such events are viewed cautiously.
“Employees and early investors might want to secure their profits or invest in other opportunities,” said Carolane de Palmas, market analyst at ActivTrades.
“Even without heavy selling, the increase in available shares is likely to keep volatility elevated.”
(Reporting by Niket Nishant and Akash Sriram in Bengaluru; Editing by Anil D’Silva)
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