'The lockup killed me': Early SpaceX investors say they're torn about whether to hold on or cash out as lockups expire

• As a wave of SpaceX insider shares get unlocked, some early investors are torn over whether to sell.
• BI spoke to three early investors who laid out how they're feeling as the first lockup expires.
• They say they have faith in the company long-term, but are wary of the stock's volatility.

Ryan D. was briefly a millionaire this summer, thanks primarily to his holding of SpaceX stock.

The 34-year-old former data analyst at SpaceX was tracking the rise and fall of Elon Musk's rocket company as the stock soared — then crashed — in the days following its record-breaking IPO. He had received 2,800 shares in 2019 when they were valued at around $4 each, according to financial records he shared with Business Insider, bringing the total value of his stake to over $630,000 when the stock peaked around $225 in mid-June. That worth about half that now, based on Thursday's intraday high around $115.

The immense IPO hype has fizzled nearly two months later, with SpaceX stock shedding $1.2 trillion in market cap and tumbling nearly 50% from the peak. Shares tanked 14% after the company's first-ever earnings report this week, and investors are looking for a catalyst to lift the stock as it struggles against a potential wave of stock sales from insiders.

Ryan hasn't touched his stake and doesn't plan to anytime soon, holding out for what he sees as long-term growth potential. But if the outlook for SpaceX continues to sour, he said he would consider getting out entirely, adding that a line in the sand for him is if SpaceX's Starship fails to progress beyond partial reusability.

Despite the post-IPO slide, early investors in Musk's rocket company are still way up on their holdings, given the company's valuation surge in the years it was privately held.

Yet, that doesn't mean it's not stressful watching the wild swings in the price of an asset that's meant to be a nest egg.

That volatility could get worse as more insider shares are unlocked through the end of the year, leaving some people who got in early torn about whether they should continue to bet on Musk's vision or head for exits before supply of available shares vastly increases.

Business Insider spoke to three early SpaceX shareholders about how they felt about the stock's rise and fall. Business Insider verified each investor's stake through screenshots and documents showing their stock awards or involvement in private investment vehicles, which gave some accredited investors early access to the company.

Ryan said he was bullish on SpaceX's long-term trajectory overall. As a former employee, he's familiar with the company's leadership and has faith that management will get the company through the current phase, which is dominated by heavy R&D spend.

"I've seen how the company works from the inside," he said. "My thoughts are long-term, I think it's probably going to do good. I mean, when has betting against Elon Musk really worked out?"

Still, he says he thinks that the worst of SpaceX's decline has yet to come, given the heavy spending on its ambitious projects, from AI to space-based compute.

"I wouldn't be able to accurately judge what the fair value of it would be today," he said, adding that he was bracing for more volatility.

Kris Dehnert, a 43-year-old business owner based in Florida, said he first got involved with SpaceX in 2022, when someone in his group of entrepreneurs and businesspeople hooked up members with private investment funds that offered exposure to SpaceX. He invested $25,000 in SpaceX's series M funding round when the company was valued at around $19 a share, a stake that ballooned to around $260,000 when SpaceX hit its post-IPO peak this summer.

"The lockup killed me," Dehnert said, adding that he would have loved to sell before shares tumbled.

Prior to the first wave of insider lockups expiring, Dehnert told Business Insider he was planning to sell around $25,000 worth of the stock — the size of his initial investment — to take some profits and leave the rest in various accounts for himself and his children.

"I had such a great entry point. I've already won," he said.

Dehnert said he would consider selling more in the future, due to concerns about the stock's volatility. If shares started to tumble below the $50 mark, he would call it quits and exit his stake, he said, though he believed it was more likely the stock would stabilize and start rising from here, citing confidence given Musk's track record.

"I'm just going to let it ride," he added.

Lance Breitstein, a day trader and investor based in California, is another early investor who says he would have loved to dump his stock when it peaked in June.

Breitstein purchased $500,000 worth of SpaceX stock through an SPV in 2024, around the time that SpaceX was valued at $210 billion. His stake is now worth over $3 million.

Breitstein said he wasn't stressed about SpaceX's post-IPO decline, given how early he bought in. Though he believes the business will likely succeed over the long term, he has doubts about whether he wants to stomach the interim volatility, and adds that he expects the stock to come under more pressure as shares are unlocked through the end of the year.

He said he would consider selling his stock if SpaceX were to rebound to around $130 per share, a level he said would be ideal for him to take profits.

"I think most of the early stage investors, they were in it for the asymmetry. And now that it's gone with these lockups, I do think a lot of people are going to be eager to say, 'Hey, we captured the bulk of this trade and let's ring the register,'" he said.

The post 'The lockup killed me': Early SpaceX investors say they're torn about whether to hold on or cash out as lockups expire appeared first on Business Insider