Space Exploration Technologies Corp. (NASDAQ: SPCX) shares declined 5.07% to $107.75 on Tuesday, extending a steep post-initial public offering sell-off that has erased more than 50% of the company’s value from its June 16 high of $225.64. The stock trades significantly below its $135 IPO price and $161 first-day close, reflecting sustained investor caution ahead of the Aug. 6 expiration of the initial lockup period. This event will allow early private investors to sell up to 911 million shares into a public float that currently represents only 4% to 5% of the total share count, creating a substantial supply risk for the market.

The structural test for the stock arrives shortly after its Aug. 4 earnings report, SpaceX’s first as a public company. Market strategist Charlie Bilello warned that the decline is likely not over, citing the imminent supply shock from the unlocking shares. He noted that while the company has grown from a $10 billion private entity to a trillion-dollar valuation, "great companies can still be bad investments at the wrong price." The prospect of massive insider selling against limited tradeable supply has kept a ceiling on any recovery attempt.

Key Price Levels and Performance

Elon Musk has signaled that investors should not expect the company to manage for near-term quarterly results. Instead, he prioritizes decisions that maximize returns over a decade-long horizon. On Monday, Musk posted on X: "I will not forget about Mars," reaffirming his commitment to long-term capital expenditure for red planet exploration. He projected that construction of a Martian city could begin within five to seven years, pushing back against suggestions that Mars had been deprioritized in favor of near-term lunar base development.

Market Expert Commentary

The sharp correction has drawn criticism from various market observers regarding IPO valuation discipline. Economist Peter Schiff noted on X that SpaceX was "coming back down to earth" when the stock touched $110.05, down 18.5% from the IPO price. Schiff stated, "This is an example of why it’s so dangerous to rush into buying a heavily hyped IPO during its first few days of trading." Bilello added that SpaceX is suffering the same fate as many major IPOs before it: a euphoric debut, unrealistic expectations, and a painful reality check.

Investors Gary Black of The Future Fund LLC and Ross Gerber of Gerber Kawasaki also commented on the decline, with Black stating that only investors who miscalculated valuation were shocked by the drop. Despite the stock’s weakness, SpaceX achieved a technical milestone with Starship completing its thirteenth test flight. The vehicle released 20 Starlink V3 satellites into orbit before steering itself to a targeted landing zone in the Indian Ocean, confirming that heat shield tiles met expectations under extreme aerodynamic stress.

What the Numbers Show

The divergence between SpaceX’s operational successes and its market valuation highlights the volatility inherent in post-IPO lockup expirations. While the company demonstrates technical progress with Starship and maintains a clear long-term vision for Mars, the market is currently pricing in the immediate liquidity risk of 911 million shares becoming eligible for sale. This suggests that near-term price action will be driven more by supply dynamics and insider selling pressure than by operational metrics, reinforcing the warning that entry timing is critical in such high-supply environments.

SpaceX’s Starlink routers have secured a conditional exemption from Federal Communications Commission (FCC) restrictions on foreign-made consumer hardware, allowing the company to continue seeking approval for new devices through Feb. 1, 2028. The exemption is critical for SpaceX, as its routers are manufactured in Vietnam, which would otherwise place them under the FCC’s Covered List of banned equipment deemed to pose unacceptable national security risks.

Conditional Approval Details

The FCC’s Covered List now identifies Starlink routers as conditionally approved by the Department of War. This designation permits SpaceX to bypass the general prohibition that blocks new covered models from receiving FCC equipment authorization before entering the U.S. market. The rule does not prevent consumers from using existing routers or retailers from selling previously approved models.

Manufacturers can avoid the restriction if the Department of War or Department of Homeland Security determines their products do not present unacceptable risks. Netgear Inc. and Amazon.com Inc. have previously secured approvals for their Nighthawk, Orbi, Eero, and Amazon Leo routers. TP-Link had not appeared on the FCC’s exemption list as of Monday.

Regulatory Context

The FCC added foreign-produced consumer routers to the Covered List in March after national security agencies concluded they posed "unacceptable risks." The agency cited potential supply-chain vulnerabilities and the threat of cyberattacks against U.S. households and critical infrastructure. FCC Chair Brendan Carr stated in a March press release that the FCC would continue ensuring U.S. cyberspace, critical infrastructure, and supply chains are safe and secure under President Trump’s leadership.

Recent Regulatory Wins

This decision extends SpaceX’s recent regulatory momentum. In January, the FCC authorized another 7,500 second-generation Starlink satellites, expanding the approved Gen2 network to 15,000 spacecraft to support gigabit internet and direct-to-cell services. The agency also modernized satellite spectrum-sharing rules, a change SpaceX requested that could unlock up to seven times more broadband capacity and more than $2 billion in economic benefits. Additionally, SpaceX and T-Mobile US Inc. won the FCC’s first commercial authorization for a satellite operator and wireless carrier to provide supplemental coverage from space.

Market Reaction

Despite the regulatory win, SPCX stock traded 3.17% lower at $109.91 in pre-market trading on Tuesday. Benzinga Edge Rankings indicate that SpaceX Stock performs poorly on Short, Medium, and Long Price Trends.