SpaceX Shares Rally 6% as Feared Insider Selloff Fails to Materialize

For weeks, SpaceX investors had braced themselves for Thursday, Aug. 6, when nearly 1 billion insider and employee shares, representing about 20% of the company, became eligible for sale, Eva Roytburg reported.

SpaceX shares rallied 6% after the expiration of a lockup period that made nearly 1 billion insider and employee shares eligible for sale. [Photo: Official SpaceX Photos Flickr]

With the stock already trading at roughly half its brief post-IPO high, investors expected the flood of additional supply—effectively doubling the freely traded float overnight—to put further downward pressure on the stock price.

Instead, after some initial weakness, the stock steadied and then climbed 6%.

So, what happened? As one former SpaceX employee told Fortune, company workers did not need an IPO to get paid.

The company has conducted roughly semiannual share buybacks for about a decade. “These are not people waiting to get their first dollar back,” the former employee said.

Gil Luria, an analyst at D.A. Davidson, said the lockup expiration had also been priced into the stock. “The stock’s been down almost every day for the last three or four weeks in anticipation of this,” Luria said.