The share price of SpaceX (SPCX.US) has retreated approximately 28% from its post-IPO closing peak above $200, prompting veteran investor George Noble to reiterate his bearish stance and warn of significant insider selling pressure in the coming months.

Veteran Investor Issues Stark Warning

Noble published a detailed analysis on platform X last Saturday, stating, "The largest IPO in history is also shaping up to be the largest liquidity exit operation in history." He bluntly asserted that "the structure of this IPO was designed to separate retail investor money from company equity."

Noble, who co-founded the Fidelity Overseas Fund, argued that SpaceX's valuation is severely disconnected from its fundamentals. He calculated that at its $135 IPO price, the company's price-to-sales ratio exceeded 90 times, and it approached 140 times after listing. He also believes the stock's initial surge was not driven by fundamentals but by what he termed an "artificial short squeeze."

Mechanics of the Alleged Squeeze

Noble noted that less than 5% of SpaceX shares were freely tradable post-IPO. The company's rapid inclusion in major indices like the Nasdaq-100 and Russell indices forced passive funds and ETFs to purchase billions of dollars worth of stock precisely when public float was at its tightest. "Supply was negligible, buying was mandatory—this is an artificially manufactured short squeeze," Noble wrote.

Lockup Expiry to Reverse the Trend

Noble believes this dynamic is set to reverse. He pointed to the company's disclosed lock-up schedule, which shows insider shares will be released in batches starting after the Q2 earnings report, continuing through year-end, with a final batch scheduled for June 2027. According to Noble's calculations, as employees and early investors gain the ability to sell, these unlock events could dramatically expand the tradable share count. He contends that the primary catalyst for the stock price in the coming months will not be company fundamentals but the disclosed unlock timetable.

Valuation and Core Business Concerns

Noble stated that Starlink is SpaceX's only consistently profitable business, but this alone is insufficient to support the company's current market capitalization. He estimates SpaceX's fair value is around $30 per share, labeling the company "the most severe large-cap valuation bubble I have ever seen." Last Friday, SpaceX shares closed around $145, only about $10 above its $135 IPO price.