How SpaceX was able to avert one of the market's biggest fears about its stock

By William Gavin

Some investors worried that SpaceX's volatile stock would have an extreme impact on indexes, but the company's staggered lockup schedule has mitigated this issue

SpaceX shares held by CEO Elon Musk won't be unlocked for trading until mid-2027, according to the company.

Ahead of SpaceX's initial public offering in June, some market experts worried that Elon Musk's then-unprofitable company and its volatile stock could have a dramatic impact on U.S. equity indexes like the Nasdaq-100.

Yet the reality has been far more tame, according to new research from Goldman Sachs.

"Outside of the very short-term trading pattern around the IPO, SpaceX has had a much smaller impact on equity indices than many investors expected," Goldman Sachs analyst Ben Snider said in a note to clients on Friday.

One way the company was able to limit volatility was by using a complicated lock-up schedule, Snider added.

SpaceX shares held by most insiders have been subject to a rolling process that has unlocked certain portions of their stock at set dates. By mid-December, all stock held by individuals other than CEO Elon Musk and select other SpaceX insiders will be free to trade. The final batch of insider shares will be unlocked after SpaceX reports earnings for the second quarter of 2027.

As a result, lockup expiration dates have "largely proved to be a non-event" for SpaceX investors, Morgan Stanley analyst Adam Jonas said in a client note last month. Nearly a third of Space shares are currently available, up from 5% in June, Goldman said.

That has mitigated the impact of SpaceX on the indices it has joined, including the Nasdaq-100 NDX, despite its turbulent stock price. SpaceX shares are currently trading at about $142, compared with their IPO price of $135 and their early peak of $225.64.

Passive exchange-traded funds owned about $32 billion of SpaceX shares at the end of October, $20 billion of which was tied to funds benchmarked to the Nasdaq-100. Planned rebalancing will likely increase the weight of SpaceX in both that index and in the Russell 1000 Growth Index RLG, the Goldman team said.

So far, SpaceX hasn't had a major effect on the Nasdaq-100. With SpaceX, the price-to-earnings ratio of the Nasdaq-100 is 19.5 times. Without it, the ratio falls to 19.2 times, Snider estimates.

Snider likened SpaceX to its sister company, Tesla (TSLA), which also saw a muted impact when it joined the S&P 500 SPX in 2020, despite at the time being the biggest company to join the widely tracked benchmark. SpaceX isn't currently eligible to join the S&P 500 because S&P Dow Jones Indices decided earlier this year not to loosen its rules around profitability and the length of time a company needs to be public before gaining entry.

However, Snider thinks SpaceX could be added to the index toward the end of next year, which would broaden passive investors' exposure to the company. By the time it reports second-quarter 2027 earnings, Goldman estimates, SpaceX will be able to meet the S&P 500's guidelines for profitability and amount of time on the public market.

-William Gavin

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11-09-26 1036ET