What's Going On With SpaceX's Share Price?
Has Musk invented an anti-gravity stock?
If there is one thing Elon Musk is known for, it’s breaking expectations. No one expected him to do that “wave”, no one expected him to use the Hyperloop concept to destroy American high-speed rail, and no one expected him to beg Jeff to go to that island for Christmas, just to name a few. He has well and truly earned his deranged edgelord status. But, every now and then, just as a broken clock is right twice a day, Musk breaks expectations in a positive way. It seems the SpaceX stock is one of those occasions. Everyone, including myself, expected it to plummet, yet it flew upwards. Why?
Well, it all started with SpaceX’s 2026 Q2 earnings call, their first earnings call since going public. It was a mixed bag to say the least.
Their quarterly revenue had nearly doubled to $7.8 billion from the previous year, which is nearly a billion more than analysts expected. But the firm’s quarterly spending ballooned to $18.3 billion, more than six times what it was a year ago. Yowch! AI mostly drove this expenditure growth. Somehow, they only posted a net loss of $143 million for the quarter (accounting can be super weird sometimes), but that does mean their total net loss for the first half of 2026 is $2 billion.
Despite the growing revenue, the market didn’t respond well to this news, with SpaceX’s stock dropping 9% in response. It isn’t hard to see why, as while a decent chunk of this revenue growth came from Starlink, most of it came from arguably shady AI data centre deals with Anthropic and Google. The issue is, despite these deals bringing in so much revenue, they likely aren’t that profitable, if at all. As such, many investors were spooked by SpaceX’s far larger than expected AI capex spend, given that it looks like a cash black hole.
This is the tightrope public AI companies have to walk. They need to be seen to be a big player and big spender in the AI bubble to generate hype and speculation to boost the share price, but they can’t be seen to be spending so much that it undermines their core business because it will cause investors to flee. This is partially why AI players like Google have seen their share price rise over the past year, while Oracle’s has fallen off a cliff.
Investors hoped SpaceX would be like Google and form a robust business that easily funds a dominant AI expansion, but with the failure of Grok, taking on new debt and these AI data centre deals, it looks like SpaceX more closely resembles Oracle. After all, it has taken on a ton of debt and infrastructure build-out liability and destroyed its business fundamentals to rent compute to the AI hyperscalers that were once seen as XAI’s competitors.
So, this little stock price crash was foreseeable, but everyone expected it to get much worse in the coming days.
You see, SpaceX’s IPO was obviously engineered to boost the share price through a tiny float and index inclusions and to allow insiders who owned SpaceX stock pre-IPO to exit fast, with incredibly rapid and large unlock periods. The first of these lock-up periods would expire just a few days after this earnings call, which would effectively double the number of tradable SpaceX stocks. Remember, at this point, SpaceX had lost half its value in just a few weeks, which had then dropped even further after the earnings call. Everyone expected these insiders to cash out before it fell any further, ballooning the stock supply and crashing its price.
We all waited with baited breath for this bloodbath to pass.
And then it didn’t.
In fact, the opposite happened. SpaceX’s stock rose roughly 15% and even reached its IPO price.
What?! But, more importantly, how?
One explanation I have seen is that this lack of insider selling suggests a vote of confidence in SpaceX. But that doesn’t account for why the stock rose so high. What’s more, there are also a ton of other explanations.
These insiders can exit their position without actually selling their stocks. This is a tactic beloved by billionaires, where, rather than selling stock, you use said stock as collateral for a loan, which is known as “buy, borrow, die”. Because loans like this are tax-free, this is a more tax-efficient way to liquidate a stock’s value than selling it, which is why it is so popular with billionaires. But this could also be a way for insiders to liquidate their SpaceX positions without flooding the market and crashing the value of their assets. It is also certain that the financial advisors for many insiders have recommended this method purely as a way to protect the inflated value of their assets. This strategy also has the advantage of locking in gains, protecting them from any future drops in value. Sure, if the stock crashes too far, the lender will issue what is known as a margin call, where you have to immediately pay back the loan because the collateral has lost its value. But there are other ways to pay that back. For example, you can use the money from this loan to buy other, more stable income-generating assets, like real estate, and then use a portion of them to pay the margin call.
Sadly, I can’t find a way to figure out how many insiders did this, but if even a few of the larger insiders used this method, it would explain the lack of a share price crash. This also suggests that the lack of a crash doesn’t mean insiders are confident in SpaceX.
