The Real Reason SpaceX Stock is Crashing

Parkev discusses SpaceX's recent financial maneuvers, including a $25 billion bond issuance occurring shortly after its $85 billion IPO. He clarifies that the company requires this capital to settle IPO-related fees and to fund its highly capital-intensive operations, as it is currently incurring billions in losses and anticipates negative free cash flow for the foreseeable future due to substantial investments.

He highlights what he terms the "Elon Musk premium," where companies under Musk's ownership tend to trade at elevated valuations, suggesting that Elon Musk might leverage this premium by selling shares. Parkev articulates a bearish sentiment regarding SpaceX stock, which is presently trading around $150 per share, representing only an 11% increase from its IPO price. He predicts that the valuation will remain volatile at these levels but foresees limited upside potential for investors who purchase the stock at its current price over the next 12 to 24 months.

A primary concern for Parkev is the projected significant increase in the supply of shares entering the market. Currently, only approximately 5% of SpaceX's shares are publicly traded. He forecasts massive share unlocks, beginning with over 3.3 billion new shares becoming available after the Q2 2026 earnings report (expected between September and October 2026), followed by potentially another 7 billion, and then an additional 10.3 billion after the Q3 2026 earnings report (in November 2026). Furthermore, the complete 180-day lock-up expiration will release 5.6 billion shares from employee and venture capital pools, with Elon Musk's personal shares, another 10 billion, set to unlock by June 13, 2027. Parkev anticipates that company insiders, including Elon Musk, will aggressively sell these shares if the price remains above $100 per share, capitalizing on the advantageous valuation. While acknowledging SpaceX's innovative nature, he cautions investors about the imminent supply shock.