Lockup Tsunami Meets Biotech IPO Wave as Market Absorption Tested

The market is running a stress test in August, though almost no one is framing it that way. Three distinct supply events — a $100 billion lockup expiry at SpaceX, a $1.9 billion unlock at Figma, and the busiest biotech IPO week since April — are arriving in the same window. Whether buyers absorb all of it, or whether one fissure widens into something harder to contain, is the structural question underneath the headline numbers.

SpaceX: The $100 Billion Unlock That Didn’t Break

On August 6, roughly 911.5 million SpaceX (NASDAQ: SPCX) shares became eligible for sale as the first tranche of the company’s staggered lockup expired. At the prior day’s closing price of $108.27, that block was valued near $100 billion — more than doubling the tradable float from approximately 639 million shares^[1].

The expected collapse never came. Shares rose over 5% in morning trading, a counterintuitive move that several analysts attributed to weeks of anticipatory positioning. JPMorgan’s Doug Anmuth noted investors had been bracing for the unlock, so much of the selling pressure had already appeared in a 15% earnings-driven decline the day before^[1]. Short interest near 35% of the float created conditions for short covering, while Cathie Wood’s ARK Invest and retail buyers stepped in to absorb supply^[1].

But today’s relief does not remove the overhang. Between now and the end of October, roughly $800 billion in additional SpaceX shares become eligible under the company’s tiered lockup schedule. Elon Musk’s own stake remains locked until approximately June 2027. The stock sits roughly 20% below its $135 IPO price and over 50% below its post-IPO high near $226^[1].

The base-rate lesson: lockup expirations more often produce muted or even positive reactions than the catastrophic selling that market lore predicts. Eligibility is not a sell order. But the scale here is without modern precedent, and the staggered schedule means this is a recurring test, not a one-day event.

Figma: The Unlock Meets the Earnings Whiplash

Figma (NYSE: FIG) faces a different version of the same supply test. On Friday, August 7, approximately 77.7 million Class A shares became available for transfer as an extended post-IPO lockup expired. At Thursday’s closing price of $23.97, the block was valued at $1.86 billion, representing 17.1% of outstanding Class A shares and 38.9% of the stated public float^[2].

The unlock arrived after a brutal session. Figma shares dropped 14.9% on Thursday despite reporting Q2 revenue of $370.1 million, up 48% year-over-year and 5.3% above the $351.6 million consensus^[2]. The problem was not the top line — it was margin compression. Free cash flow fell 12.2% to $53.2 million, with the FCF margin declining to 14% from 24% a year earlier. GAAP gross margin dropped 5.2 percentage points to 83.7%. Research and development expenses more than doubled to $167.3 million, up 101.5%^[2].

Management raised its full-year revenue midpoint by $40 million to $1.465 billion but held the non-GAAP operating income guide flat at $125–$135 million, signaling that AI investment costs are consuming incremental revenue^[2]. The company covers inference costs itself during beta and does not yet charge for several AI products. CFO Praveer Melwani told Reuters the firm was “really investing on the new product side”^[2].

Analysts split evenly: five buy, five hold, zero sell, with a mean price target of $30.33 — a 26.5% premium to Thursday’s close. Wells Fargo cut its target from $36 to $34, and Morgan Stanley lowered from $38 to $33^[2].

The indicator to watch: volume near Thursday’s intraday low of $22.14. If eligible shareholders sell into weakness and buyers fail to absorb, the float expansion turns from theoretical to active. If volume stays elevated and the price holds, the overhang may be psychological rather than mechanical.

Biotech IPOs: The Busiest Week Since April

While lockups tested the secondary market, the primary market staged its own surge. The week of August 3 saw six IPOs and five SPACs price on U.S. exchanges, the busiest stretch for biotech offerings since mid-April^[3].

Four biotechs raised a combined $1.2 billion^[4]:

Braveheart Bio, developing an oral cardiac myosin inhibitor for hypertrophic cardiomyopathy, was the standout: it upsized, priced above range, and gained 66% on its first day^[3]. Latigo, a pain-focused biotech with a Nav1.8 inhibitor entering Phase 3, priced at the top of its range^[3]. BlossomHill, founded by the team behind Turning Point Therapeutics (acquired by BMS for $4 billion), raised $150 million at a $503 million market cap to challenge AstraZeneca’s Tagrisso in EGFR-mutant NSCLC^[5].

Two non-biotech deals rounded out the week: River City Bank (RCBC), a Northern California commercial bank, raised $122 million in a downsized offering and finished up 4%. Latin American ticketing platform Ticketplus (TP) raised $15 million at the bottom of its range and fell 13%^[3].

Twenty biotechs have now raised $6.9 billion via NASDAQ IPOs year-to-date, with 14 posting first-day gains^[4]. The broader IPO market has seen 97 deals priced this year, down 25.4% from the same period in 2025, raising $145.1 billion in total proceeds^[6]. The Renaissance IPO Index is up 18.8% YTD, outpacing the S&P 500’s 13.4%^[3].

The pattern worth flagging: deal quality is bifurcating. Upsized, Phase 3-ready biotechs with clear regulatory catalysts are pricing above range and trading up. Smaller, earlier-stage, or less differentiated offerings are pricing at the bottom and fading. The market is open for issuance, but it is pricing selectivity with a level of discipline that was absent in the 2021 window.

SPACs: The Quiet Comeback

Five SPACs priced in the same week — Pinnacle Acquisition ($200M), BOA Acquisition II ($125M), ARC Group Securities I ($105M), OceanLight Acquisition ($100M), and TCGX Acquisition ($75M) — and eight more filed initial registration statements^[3]. Churchill Capital Corp XIII (a separately announced deal) closed an upsized $414 million SPAC IPO on August 3^[7].

Seven blank-check deals hit the market in three days between August 3 and August 5, the densest run of SPAC activity of the summer^[6]. The targets skew toward AI, fintech, healthcare, and advanced computing — sectors where investor appetite remains strong enough to support trust-account capital raises at $10 per unit.

This is not 2021 revisited. The deal sizes are smaller, the sponsor economics are more constrained, and the redemption-track-record overhang from the last cycle is still fresh. But the filing pace is accelerating, and if even a fraction of these SPACs complete de-SPAC transactions in 2027, the pipeline of new equity supply extends well beyond the current IPO calendar.

Secondary Supply: Primo Brands and the PE Exit Pattern

On August 6, Primo Brands Corporation (NYSE: PRMB) announced a secondary offering of 20 million Class A shares by an affiliate of One Rock Capital Partners. Primo Brands itself will not receive proceeds; the company separately agreed to repurchase $10 million of shares from the selling stockholder^[8].

The structure is a textbook private-equity exit: a sponsor monetizing a portion of its position into public-market liquidity, with a modest concurrent buyback to signal confidence and stabilize the order book. It is a pattern that recurs in the back half of any year when sponsors face pressure to return capital, and it adds to the secondary supply that runs alongside IPO issuance.

What to Watch Next

• SpaceX tranche schedule: The next conditional unlock depends on a price threshold — if the stock rises to the $175.50 trigger identified in the prospectus, additional shares release. Monitor whether the stock approaches that level and whether insider 10b5-1 selling plans materialize^[1].
• Figma volume at the $22.14 floor: If turnover remains high and the price breaks below Thursday’s low, the 77.7 million-share unlock is converting from overhang to active supply. If volume normalizes, the market has absorbed it^[2].
• Biotech IPO reception: Next week’s slate will show whether Braveheart’s 67% pop was a one-off or reflects genuine appetite for Phase 3-ready assets. Watch for the split between upsized deals (strong demand) and downsized deals (weak demand) as a real-time gauge of selectivity.
• SPAC de-SPAC pipeline: The eight new SPAC filings this week join a backlog that will produce merger announcements through 2027. Each successful de-SPAC adds a new equity supply event to an already crowded calendar.
• Renaissance IPO Index vs. S&P 500: The 18.8% YTD outperformance of newly public companies is attracting issuer interest. If that gap narrows — either because IPOs roll over or the broad market catches up — the issuance window narrows with it^[3].

The convergence matters because each event in isolation is manageable. A lockup expiry at one company, a biotech IPO week, a SPAC filing surge — the market handles these routinely. But the simultaneous arrival of $100 billion in newly eligible SpaceX shares, $1.9 billion in Figma unlock, $1.2 billion in fresh biotech supply, and a resurgent SPAC pipeline creates a cumulative absorption test. The early read is that demand is keeping pace. The question is whether it continues to.