SpaceX’s first batch of restricted shares becomes tradable, with up to about 911.5 million shares entering the sellable window. The market had expected a sell-off after the unlock, but instead the stock price rose by roughly 6%.
My understanding is that it’s still too early to say “the unlock overhang has been digested.” It looks more like the sell-off before the decline—first forcing the shorts to get squeezed. With the high capital expenditures after the earnings report, losses piling on, and a massive unlock, the market’s bearish expectations were too consistent. Many funds shorted in advance. When the unlock actually occurs, the selling pressure doesn’t show up immediately; instead the stock price climbs, which easily triggers short covering and stop-losses, further amplifying the rally.
The real test comes after the short squeeze ends. If the unlocked shares are gradually released afterward and the stock price comes under renewed pressure, then this upswing is likely just creating liquidity for sell orders. Only if it can continue to withstand the selling pressure does it truly suggest that the unlock overhang has been digested by the market.
So this 6% gain only shows that the shorts have lost first—it doesn’t yet prove that the bulls have won. $SPCXB
My understanding is that it’s still too early to say “the unlock overhang has been digested.” It looks more like the sell-off before the decline—first forcing the shorts to get squeezed. With the high capital expenditures after the earnings report, losses piling on, and a massive unlock, the market’s bearish expectations were too consistent. Many funds shorted in advance. When the unlock actually occurs, the selling pressure doesn’t show up immediately; instead the stock price climbs, which easily triggers short covering and stop-losses, further amplifying the rally.
The real test comes after the short squeeze ends. If the unlocked shares are gradually released afterward and the stock price comes under renewed pressure, then this upswing is likely just creating liquidity for sell orders. Only if it can continue to withstand the selling pressure does it truly suggest that the unlock overhang has been digested by the market.
So this 6% gain only shows that the shorts have lost first—it doesn’t yet prove that the bulls have won. $SPCXB