Xanadu (XNDU) shares were attempting a rebound in premarket trading on Wednesday, climbing more than 4% after collapsing 21.6% in the previous session. The stock closed Tuesday at $5.78, down from $7.37 a day earlier, after sinking as low as $5.32 during Tuesday's session. The decline pushed the stock further into a steep multi-month slide.

The selloff coincided with the expiration of Xanadu's six-month lockup restrictions, which had prevented many early holders from selling their XNDU shares, and with a disclosed sale of 4.6 million shares by the company's chief executive. Trading volume surged to roughly 35 million shares on Tuesday from about 2.2 million on Monday, reflecting the abrupt increase in tradable supply.

The shares involved are Xanadu Quantum Technologies Limited's Class B Subordinate Voting Shares, which trade under the ticker XNDU.

Lockup Expiration Unlocks New Supply

The primary catalyst was the expiry of restrictions set out in Xanadu's prospectus, which ran up to 180 days following the March 26 closing of the company's business combination. Once those restrictions lapsed, the amount of XNDU stock eligible for trading expanded sharply.

Lockups of this kind are a routine feature of companies reaching public markets through business combinations, keeping early shares out of the market until after the listing has had time to settle. Their expiration is among the most closely watched milestones for recently public stocks, since it can quickly shift the balance between tradable supply and buyer demand — as Tuesday's volume spike illustrated.

The expiration potentially added about 255 million shares to the tradable pool, compared with roughly 43 million previously available, according to Benzinga. That does not mean every newly eligible holder will sell, but it substantially increases potential supply, and that pressure appears to have been central to Tuesday's selloff.

XNDU had already been weakening ahead of the expiration, falling from $9.05 on September 9 to $7.37 by September 21.

CEO Sold 4.6 Million Shares on Expiration Day

Direct insider selling also took place on the day the lockup expired. Xanadu disclosed that CEO Christian Weedbrook sold 4.6 million Class B Subordinate Voting shares on September 22.

According to the company, Weedbrook first converted 4.6 million Class A Multiple Voting shares into Class B shares on a one-for-one basis. He then sold the Class B position through the Toronto Stock Exchange and other published markets for gross proceeds of approximately C$32.83 million. The conversion into Class B shares is what positioned the stake for the open-market sale, since that is the class trading under the XNDU ticker.

Xanadu said the sale was carried out for Weedbrook's personal financial planning purposes. He remains a large holder following the transaction, with approximately 41.83 million Class A shares and 18,593 Class B shares.

The CEO's sale provides concrete evidence that at least some newly tradable stock reached the market on Tuesday. Even so, the company has not said that insider selling alone caused the full 21.6% decline.

Xanadu Appoints New Chief People Officer

In a separate development, Xanadu appointed Tara Deakin as Chief People Officer as the company prepares for further organizational growth. Rebecca Laramée, who previously held the Chief People Officer role, will remain with the company as Senior Vice President of Human Resources.

Weedbrook said Deakin's experience in enterprise transformation and workforce strategy would support Xanadu's effort to build a utility-scale, fault-tolerant quantum computer. The appointment is a confirmed operational development, but there is little evidence that it influenced Tuesday's trading.

Volatility Remains Elevated

XNDU remains a highly volatile stock. Its Tuesday close of $5.78 compares with a 52-week range of roughly $5.32 to $42.44, illustrating how dramatically the valuation has moved since the company became public.

The expanded tradable supply now represents a principal investor risk, particularly if more founders, employees or early backers decide to sell. Xanadu also remains an early-stage quantum computing company, leaving investors exposed to funding needs, execution risk and potentially sharp price swings.

Wednesday's premarket rebound suggests some buyers returned after the selloff, but the supply issue has not disappeared. Whether additional newly eligible holders sell will show up in future disclosure filings and trading volume, the standard channels through which insider and early-holder activity becomes visible once a lockup ends. The latest confirmed development remains Weedbrook's sale of 4.6 million shares alongside the expiration of the company's six-month lockup restrictions.