SpaceX is set to report its first earnings as a public company on Tuesday, and options traders are bracing for a big move. Derivatives pricing implies a swing of roughly 15% in either direction after the release — a level of expected volatility that reflects both the novelty of the report and the unusual pressures surrounding the stock.
The company, which went public earlier this year in one of the most anticipated IPOs in recent memory, has seen its shares fall about 43% from their post-IPO peak. That decline has left many early investors nursing losses and has set a tense backdrop for the company's first quarterly update.
Why the lock-up matters
Adding to the uncertainty is the expiration of the lock-up period on August 6. Lock-ups are standard in IPOs: they prevent insiders — founders, early employees, and venture backers — from selling shares for a set period after the listing. When the lock-up ends, those holders are free to sell, which can flood the market with supply and push the stock down.
In SpaceX's case, the lock-up ending just days after the earnings report means investors could be hit with a one-two punch: a volatile earnings reaction followed by a wave of potential insider selling. Options traders are clearly pricing in that risk, with implied volatility suggesting a move far larger than the typical single-digit percentage swing seen after most companies' earnings.
It's worth noting that lock-up expirations don't always lead to sell-offs. If the earnings report is strong and the outlook is upbeat, insiders may hold off on selling, and the market could absorb any supply. But the combination of a first-ever earnings report and a looming lock-up expiration is a recipe for heightened uncertainty.
What to expect from the report
SpaceX's business is unlike most companies that report earnings. Its revenue comes primarily from launching satellites and spacecraft for commercial and government clients, as well as from its Starlink internet service, which has grown rapidly. The company has been valued at over $200 billion in private markets, and its public listing was seen as a milestone for the commercial space industry.
Investors will be watching for updates on launch cadence, Starlink subscriber growth, and any commentary on the company's long-term projects, such as Starship development. But because this is the first earnings report, there's no prior quarter to compare against, which makes it harder for analysts to gauge whether results are in line with expectations.
The company's financials have historically been opaque, and even now, as a public entity, it may provide limited guidance. That lack of clarity could amplify the market's reaction, as traders will be interpreting the numbers without a well-established baseline.
What it means for investors
For everyday investors, the key takeaway is that SpaceX's stock is likely to be highly volatile in the coming days. A 15% move is significant — it could wipe out or add billions in market value in a single session. If you hold the stock, you should be prepared for that kind of swing, especially with the lock-up expiration looming.
Options traders are essentially betting that the earnings report will be a major catalyst, but the direction is far from certain. A strong report could send the stock soaring, while a disappointing one — or even a good report that gets overshadowed by lock-up concerns — could push it lower.
It's also worth remembering that SpaceX is a unique company with a unique investor base. Many shareholders are long-term believers in the company's mission, and they may be less inclined to sell on short-term news. But the 43% decline from the peak suggests that some of the post-IPO enthusiasm has already faded.
For those watching from the sidelines, the earnings report and the lock-up expiration will be important events to monitor. They could set the tone for the stock for the rest of the year, and they may also offer clues about how other high-profile tech IPOs might fare in the current market environment.
As always, it's wise to focus on the long-term fundamentals rather than getting caught up in short-term noise. But for now, all eyes are on Tuesday's report — and on August 6.
