Roughly $100 billion of SpaceX shares unlocked and the consensus was unanimous: more supply, lower price. I saw hundreds of posts calling the end. Then it ripped off its all-time low, two days running.
The base logic isn’t stupid. More sellers, same buyers, price falls. But markets are forward-looking, and that’s the crack in it.
My first move was a pattern match. Facebook in 2012, one of the largest IPOs ever, cut in half from 200 to 100, and then right around the unlock it turned and never looked back. Compelling, and completely worthless as evidence. That’s an N of one and my own confirmation bias.
So I checked the literature. Field and Hanka studied roughly 3,000 lockup expirations and found an average abnormal return around negative 1.8%. The crowd is right on average. My instinct is wrong on average.
Which is where it gets interesting. SpaceX fell for about twenty straight sessions into the event with no bad news attached, just anticipation. The event was already paid for. And realistically, would you dump your entire position into a stock that’s halved? You sell a slice and hold the rest.
So the real question isn’t whether unlocks are bearish. It’s whether a deep decline into one flips it. That’s the data I’m pulling next, and if there’s an edge I’ll show it either way.
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Michael Nauss, CMT, CAIA, CDMS