RESOLVING THE LEDGER
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See the full story · 3 sourcesConcerns remained about how long SpaceX’s profitable Starlink business would bankroll costly AI investments.
Listen Summarise Retail investors sold a net US$4.5 million in SpaceX shares on Aug 7, marking their first net selling since its June IPO debut. The shift to selling was driven by profit-taking and reassessment of risks, not panic, despite shares rebounding near the IPO price. SpaceX shares have fallen over 22% below IPO price recently, with increased public trading liquidity after lock-up expiries influencing investor behaviour. AI generated
Retail investors who spent weeks defending SpaceX through its post-IPO run turned net sellers on Aug 7, marking the first such instance since the company’s blockbuster debut in June.
Mom-and-pop traders sold a net US$4.5 million (S$5.8 million) in Elon Musk’s rocket company, the first net negative reading since the company went public on June 12, according to Vanda Research data.
“A shift from persistent net buying to selling is rarely about one catalyst, it is usually a mix of profit-taking, position fatigue and investors reassessing the risk-reward,” said Sam North, market analyst at eToro.
“Friday is particularly interesting because retail turned net sellers while the shares were rebounding strongly and trading back around the IPO price. That looks more like investors using strength to take some money off the table than panic selling.”
This comes just days after individual investors “bought the dip” as shares slumped 13.6 per cent on Aug 5, when retail net-buying was the fourth-highest since the company’s June debut.
The reversal in sentiment tracks a broader unwind in SpaceX’s share price. The stock surged as much as 67 per cent above its US$135 IPO price in June before giving back all of the gains and falling more than 22 per cent below its debut price earlier in August.
Despite the recent jump, its shares have closed below the IPO price every day since July 16.
Small investors have been crucial in the company’s history on the public markets, as at least 30 per cent of shares that were made available on debut were set aside for retail buyers.
Jai Malhi, senior equities strategist at Vanda, estimates that retail traders on average paid US$147 for SpaceX shares since the IPO, so “the selling may have been a function of cutting losses at an opportune time”.
In the last one week, SpaceX was the second most mentioned ticker on Reddit forum r/WallStreetBets, per sentiment aggregator SwaggyStocks.
Liquidity conditions have also changed as the number of SpaceX shares available for public trading more than doubled following the expiry of the first of several lock-up restrictions last week. REUTERS
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