Future Fund manager Gary Black warned retail investors against buying the dip in Space Exploration Technologies Corp. (NASDAQ: SPCX) shares, citing an imminent surge in supply that threatens to overwhelm current demand. Black argued that the optimism driving individual investors to purchase shares overlooks a massive post-IPO share unlock scheduled for Thursday, which is set to more than double the company’s publicly tradable float.

The warning comes as Vanda Research data revealed a sharp divergence in trading behavior during Wednesday’s session. Individual investors bought a net $22 million of SpaceX shares in the first hour of trading, even as institutional investors sold off positions following the company’s first earnings report as a publicly traded entity. Black stated on X that the retail buying strategy "makes no sense" given that 911.5 million new SPCX shares are potentially entering the float tomorrow.

Unlock Mechanics and Supply Pressure

The upcoming lockup expiration covers approximately 7% of SpaceX’s 13.09 billion shares outstanding. The newly eligible shares are primarily held by executives, employees, and early investors. This release will significantly expand the freely tradable float, with additional share unlocks planned through June next year.

Valuation Concerns and Price Action

SpaceX shares have faced downward pressure this week despite beating Wall Street estimates in the second quarter. Investor focus shifted to the company’s $18.4 billion in capital expenditures, most of which was directed toward AI infrastructure. Tech analyst Dan Ives described the heavy investment as a "necessary buildout" for SpaceX’s long-term vision, but the market reaction has been negative.

Black previously predicted last month that the stock could fall below $100 in the coming weeks, citing excessive valuation and weakening sentiment toward AI-related stocks. Shares fell 13.61% on Tuesday to close at $108.27 before paring some losses in extended trading to gain 1.61%. The stock has declined approximately 52% from its post-IPO peak of about $225 reached shortly after its June debut.

What the Numbers Show

The divergence between retail buying and institutional selling highlights a potential liquidity risk. With the float set to double, the existing demand from retail investors—represented by the $22 million net buy—is likely insufficient to absorb the sudden influx of 911.5 million shares without significant price impact. This supply shock, combined with high capital expenditure requirements, creates a challenging near-term outlook for the stock price.

Space Exploration Technologies Corp. (NASDAQ: SPCX) reported second-quarter revenue of $7.8 billion, a 92% increase year-over-year, but recorded a net loss of $541 million in its first earnings report as a public company. The results were driven by massive capital expenditures of $18.4 billion, including $15.8 billion allocated to artificial intelligence infrastructure. Investors reacted negatively to the spending pace, sending shares down 13.6% to approximately $108.29 on August 5.

The financial disclosure marks a pivotal moment for the Elon Musk-led aerospace giant, which went public in June with an IPO price of $135. While the company beat analyst expectations for revenue, which had been projected at $6.87 billion by Benzinga Pro estimates, the widening gap between top-line growth and bottom-line profitability has intensified scrutiny. The stock’s decline erased roughly $87.2 billion from Musk’s net worth, dropping it from $783.3 billion to $696.1 billion according to the Forbes Billionaires Index.

Financial Performance and Capital Allocation

SpaceX’s Q2 results highlight a capital-intensive growth strategy that prioritizes long-term infrastructure over immediate profitability. The company is not expected to turn profitable until 2027. The $18.4 billion in capital expenditures represents a significant cash burn, with the majority directed toward AI infrastructure and Starship development.

The previous quarter saw SpaceX post $4.6 billion in revenue against a net loss of $4.2 billion. The current quarter’s narrower net loss of $541 million contrasts sharply with the prior period’s wider deficit, though the absolute scale of capital investment remains the dominant financial feature.

Stock Volatility and Market Position

SpaceX shares have experienced extreme volatility since their debut. The stock opened at $150 on June 12, closing its first day at $160.95 before reaching a peak of $201.80 on June 16. By August 4, the price had fallen to $125.30, a decline of 38% from its peak and 7% below the offering price. Following the earnings release, the drop to $108.29 left the stock 20% below its IPO price and 46% beneath its June closing high.

This performance underscores investor caution regarding valuation and cash flow dynamics. The upcoming expiration of the insider lockup on August 6 adds further pressure, as approximately 911 million shares become eligible for sale. This potential liquidity event may exacerbate selling pressure given the current negative price trend across short, medium, and long-term metrics.

What the Numbers Show

The divergence between revenue acceleration and persistent losses illustrates the heavy upfront costs associated with SpaceX’s dual focus on space exploration and AI infrastructure. While revenue nearly doubled year-over-year, the $15.8 billion spent on AI infrastructure alone exceeds the entire quarterly revenue. This suggests that near-term profitability will remain constrained by strategic investments rather than operational inefficiencies. Investors are now balancing the company’s strong market position and growth trajectory against the reality of substantial capital requirements and delayed returns.