Jim Cramer advised investors to delay purchasing SpaceX (SPCX) stocks despite the stock hitting new lows on Tuesday, when it fell to $107.01 before recovering to close at $116.41. The stock has declined approximately 29% over the past month and now trades below its initial public offering price of $135. Cramer cited the upcoming August 6 lockup expiration as the primary reason for his caution, when roughly 911.5 million shares will become eligible for sale. He expects this supply increase to push the stock price lower. SpaceX's stock has fallen 48% from its June 16 high of $225.64, marking a significant downturn since its public market debut.
SpaceX Stock Falls to $107.01 Before Recovering to $116.41
SPCX reached its lowest level since the IPO at $107.01 on Tuesday before closing at $116.41, up 2.56%. The stock now sits roughly 48% below its June 16 high of $225.64.
Cramer Warns of August 6 Lockup Expiration Impact
Cramer told viewers that approximately 911.5 million shares will become eligible for sale next Thursday, more than doubling SpaceX's public float.
"If you're looking to buy SpaceX ... I'm begging you if you want to go big to at least wait for the first wave of the lockup on insider selling to expire next Thursday and let it drag the share price lower before you pull the trigger," he said.
Despite his long-term bullish view on Musk and SpaceX, Cramer cautioned that the company's August 4 earnings report and the August 6 lockup expiration could drive further weakness in the stock.
"Even if they report a great quarter on Tuesday, I don't know if it can withstand the lockup expiration on Thursday," he added.
SpaceX Reports First Earnings as Public Company on August 4
SpaceX reports after Tuesday's close, its first set of numbers as a listed company. Cramer said investors will closely watch its AI business, which has been boosted by multibillion-dollar computing deals with Anthropic and Alphabet.
However, he noted the contracts can be terminated with 90 days' notice, making "new revenue stream very tough to model." He also questioned expectations for similar deals, warning that there "aren't many other companies with such deep pockets."
Cramer said both issues leave Wall Street's multi-year earnings estimates hard to trust.
FAQ
Why did Jim Cramer advise against buying SpaceX stocks now?
Cramer advised investors to wait because roughly 911.5 million shares will become eligible for sale on August 6, which he expects will drag the share price lower as the supply more than doubles SpaceX's public float.
What price did SpaceX stock reach on Tuesday?
SPCX fell to $107.01 on Tuesday, its lowest level since the IPO, before recovering to close at $116.41, up 2.56%. The stock now trades below its initial public offering price of $135.
When does SpaceX report its first earnings as a public company?
SpaceX reports after Tuesday's close on August 4, marking its first set of financial results as a listed company. Cramer noted that investors will closely watch its AI business, which includes multibillion-dollar computing deals with Anthropic and Alphabet.
