SpaceX’s landmark initial public offering made headlines for its size, but the amount of stock available to public investors is still relatively small. According to the report, the company sold 555.6 million shares to the public, which works out to about 4% of the business, with the rest held by insiders, employees and major shareholders.
Lockups are designed to limit early selling pressure
Elon Musk is among the largest holders, with an estimated 42% stake in the company through more than 4.8 billion shares and stock options. However, he is subject to an extended lockup that prevents him from selling any of those holdings until June of next year, or 366 days after the IPO.
The report says SpaceX arranged several staggered lockup periods to reduce volatility in the stock after the listing. Some shares can be sold after the company’s second-quarter earnings report, with additional stock becoming available after third-quarter results. More shares are set to unlock in stages on days 70, 90, 105, 120 and 135 after the IPO, while the remaining shares outside Musk’s extended restriction are scheduled to unlock at the usual 180-day mark.
For now, that structure means Musk’s massive stake stays off the market even as other holders gradually gain the ability to sell. The company’s approach is intended to avoid a flood of shares hitting trading at once, especially given the attention surrounding Musk and his companies.
Source: nasdaq.com
