By Niket Nishant and Akash Sriram
Aug 6 (Reuters) - SpaceX stock rose in heavy trading on Thursday, as the number of shares available for public trading more than doubled following the expiry of the first of several lockup restrictions.
The internet and rocket company's stock was up 1.4% at $109.86, with over $23 billion worth of the shares exchanged as of midday, on track for SpaceX's busiest session since the eve of its addition to the Nasdaq 100 on July 7.
While SpaceX's IPO was the largest in U.S.
history, it made fewer than 5% of its shares available for stock market trading.
However, a series of restrictions on additional stock sales by insiders, employees and early investors is scheduled to lift over the next several months. Thursday's is the first of those releases, with rank-and-file employees and some early investors now free to sell 911.5 million shares, adding to the approximately 639 million shares sold in the IPO.
All in all, restrictions lifted through December 8 will increase SpaceX's float of potentially tradeable shares to 40% of the company. The remaining 60%, including Musk's stake, will stay locked up until mid-2027.
Shares of SpaceX have dropped since the company's blockbuster stock market debut, with the stock last tumbling about 14% on Wednesday after its quarterly report added to worries about the company's steep operating losses and plans for massive spending on AI infrastructure.
Investors view approaching lockup expiries as potentially driving down share prices. A lockup 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."
FRAGILE SENTIMENT
SpaceX is at a critical juncture after a steep selloff left its shares trading below their $135 IPO price for three straight weeks, a sharp reversal from June when the stock's surge briefly pushed the company's valuation close to $3 trillion, surpassing Microsoft and Amazon.
High AI bills, which the company disclosed in its first earnings report after going public, have also stirred concerns over the costs of data centers and chips.
The retreat has left the company underperforming tech stocks.
Since its June 12 debut, SpaceX shares have lost more than a quarter of their value, while the tech-heavy Nasdaq Composite has gained about 2%.
The Roundhill Magnificent Seven ETF, which tracks a group of mega-cap technology companies with far longer track records as publicly traded firms, has risen 4.8%.
However, SpaceX is "a company that has successfully achieved incredible efficiencies in both launch and satellites, and it is already applying that mentality to building AI infrastructure," said Micah Walter-Range, a space industry specialist who helped develop the index tracked by the Procure Space ETF.
Some investors also argue that the company remains a once-in-a-lifetime opportunity, and contend that the focus should be on its long-term prospects.
"We invested in SpaceX for the long term. This is a 10-year trade for us," said Phillip Lord, CEO of Bitcoin Japan, which has invested in SpaceX.
"You're worried about 5%, 10% or 20% potential downside on a stock move. This guy's disrupting the world," he added, referring to Musk.
Musk has said SpaceX may bring in $1 trillion in revenue by 2030.
(Reporting by Niket Nishant, Akash Sriram and Johann M Cherian in Bengaluru; Additional reporting by Noel Randewich in San Francisco; Editing by Anil D'Silva and Cynthia Osterman)
