SpaceX retail investors sell $4.5 million in shares, first net outflow since IPO
Retail investors turned into net sellers of SpaceX shares as of August 7, marking the end of a buying frenzy. This change coincided with a stock price recovery, indicating that individuals may be taking profits. The shares have struggled post-IPO, dropping beneath the initial offering price. Investors who were hopeful at the launch might now be looking to reduce their losses, even amidst a slight…
On August 7, retail investors became net sellers of SpaceX shares for the first time since the company's IPO in June, according to Vanda Research. The day saw individual investors sell a net $4.5 million worth of SpaceX shares, reported Reuters. This shift occurred after a period of robust retail buying, including a notable dip-buying surge following a 13.6% decline in the stock price on August 5.
Market analyst Sam North from eToro explained that a transition from consistent net buying to selling is typically driven by a combination of profit-taking, position fatigue, and reassessments of risk-reward. On this particular day, North noted that retail investors were selling while the shares were rebounding strongly and trading near the IPO price, suggesting that it was more of an opportunity to cut losses rather than panic selling.
SpaceX shares have faced challenges since their IPO, climbing up to 67% above the $135 IPO price in June before losing those gains and falling more than 22% below the debut price in August. As of Monday, shares were up 1.4% at $134.95, having surged nearly 23% the previous week. Despite this recent recovery, the stock has closed below its IPO price every day since July 16.
Retail investors have been instrumental in SpaceX's initial public offering, with at least 30% of the shares allocated to retail buyers. Jai Malhi, a senior equities strategist at Vanda, estimated that retail traders had paid an average of $147 for SpaceX shares since the IPO, indicating that "the selling may have been a function of cutting losses at an opportune time."
The interest in SpaceX's stock remains high, with the company being the second-most mentioned ticker on Reddit forum r/WallStreetBets over the past week, according to sentiment aggregator SwaggyStocks. Furthermore, the number of SpaceX shares available for public trading has more than doubled after the expiry of the first lock-up restrictions last week.
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