SpaceX will debut on the Nasdaq on Thursday, June 11, at $135 a share, in what is being called the largest initial public offering in history. The listing comes with an unusual lockup structure that lets a select group of shareholders sell immediately, while Elon Musk cannot sell any of his shares for one year after the IPO.
An Unusual Lockup Structure
Standard IPOs impose a 180-day lockup on all insiders. SpaceX is breaking that mold. The company reserved 5% of the offering for a direct share program, or DSP, with participants chosen at the discretion of executive officers. Those DSP holders face no lockup restrictions — they can sell the moment trading begins.
Everyone else who isn't in the DSP gets a staggered release. Early investors who didn't receive a DSP allocation can sell 20% of their stake after SpaceX’s first earnings report as a public company. After that, additional 7% tranches unlock at 70, 90, 105, 120, and 135 days. It’s a slow drip designed to avoid flooding the market.
Early Investors Plan to Sell
Chad Anderson, founder of Space Capital and an early SpaceX investor, didn’t mince words. “We’ve been invested for almost ten years, it’s our business to return capital to investors,” he said. That’s a clear signal his firm intends to sell.
Another early backer is reportedly in a bigger hurry. A hedge fund, according to the Australian Financial Review, is preparing to offload its SpaceX stake as soon as possible. The combination of a near-decade-long hold and a red-hot IPO price seems to be prompting a rush for the exit among those who can get out quickly.
Valuation Concerns and Market Timing
Not everyone is convinced the $135 price is a bargain. Morningstar’s analysts estimate SpaceX’s fair value at roughly half the IPO price. They’re advising investors to wait for the hype to pass before buying. That’s a stark contrast to the frenzy expected on debut day.
The timing of the listing adds another layer of uncertainty. The same week SpaceX starts trading, consumer price index data is due out, and the market has been pricing in a Federal Reserve rate hike. A hot CPI number could rattle stocks across the board, SpaceX included. The IPO is launching into a market already jittery about inflation and monetary policy.
For the early investors who have waited years, the immediate payoff looks real. For everyone else — including Musk, who's locked up for a year — the real test starts after the confetti settles.
