Space Exploration Technologies Corp. (NASDAQ:SPCX) or SpaceX stock traded lower on Tuesday in the premarket session and then reversed its losses. The stock volatility was impacted by an ongoing post-initial public offering sell-off that reduced its value more than 50% from its June highs.

• What’s going on with SPCX stock today?

Post-IPO Sell-off Drives Downward Pressure

SpaceX dropped from its June 16 high of $225.64, breaking below its $135 IPO price and its $161 first-day close. On Monday, CEO Elon Musk posted on social media that he “will not forget about Mars,” highlighting long-term capital expenditure requirements for red planet exploration.

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Upcoming Insider Lockup Expiration Warning

Market strategist Charlie Bilello warned on Sunday in a market broadcast that an upcoming catalyst arrives two days after the company’s Aug. 4 earnings report. On Aug. 6, an initial lockup period expires, making 911 million shares eligible for insider sale. "There’s definitely going to be some selling pressure," Bilello noted regarding early private investors releasing stock into the market.

Market Experts Weigh In On Stock Valuation

Commenting on the stock trajectory, Bilello stated, "SpaceX is suffering the same fate as so many major IPOs before it: a euphoric debut, unrealistic expectations, and a painful reality check." Addressing historical trends, Bilello added, “A lot of people said, ‘No, Charlie, this time is different.’ Well, it’s not different.”

On Monday, economist Peter Schiff noted on X that SpaceX was "coming back down to earth" when 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."

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.

SPCX Stock Price Activity: SpaceX shares were down as much as 5% in the premarket. At the time of writing, SpaceX shares were up 1.53% at $115.23 at the time of publication on Tuesday, according to Benzinga Pro data.

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