SpaceX structured its IPO lock-up agreements with a series of staggered release dates that allow most insiders to sell portions of their stock well before the standard 180-day window closes.
The phased release schedule could expand the float faster than usual, potentially accelerating SpaceX's inclusion in the Nasdaq 100
Bloomberg / Getty Images
SpaceX structured its IPO lock-up agreements with a series of staggered release dates that allow most insiders to sell portions of their stock well before the standard 180-day window closes.
The S-1 filing lays out a tiered system tied to earnings milestones. Once SpaceX publishes results covering the April–June quarter — marking its debut as a publicly traded company — the lock-up lifts on up to 20% of eligible insider shares, with a further 10% unlocking on top of that if the stock has climbed at least 30% over its offering price by then, CNBC reported.
Five time-based tranches — at 70, 90, 105, 120, and 135 days after the offering — each free up another 7% of eligible shares, per CNBC. A further 28% unlocks when SpaceX releases its July–September quarterly earnings, and the full remainder comes off restriction once the 180-day period concludes.
The filing carves out Musk entirely from the accelerated release schedule, keeping him subject to the full restriction period, CNBC noted. Separately, the S-1 makes clear that the share sale in the offering itself is limited to SpaceX as an entity — no existing holders are cashing out at the time of listing.
The structure could expand the tradeable float faster than a conventional lock-up, which matters for index inclusion. Nasdaq $NDAQ introduced a "fast entry" provision on May 1 allowing large newly public companies to qualify for the Nasdaq-100 after only 15 trading sessions, as Quartz previously reported. A larger float would give SpaceX a higher weighting in the index, triggering more buying from funds that track it. Until more shares become available to trade, a company's position in the index carries less weight, CNBC reported.
Spreading out the release of insider shares over time may also blunt a dynamic familiar to newly public companies: as a single lock-up expiration date approaches, markets tend to price in the coming flood of sellable shares well in advance, dragging on the stock price, CNBC observed.
SpaceX publicly filed its S-1 on Wednesday, targeting a listing on the Nasdaq under the ticker SPCX. The company is seeking to raise as much as $75 billion at a valuation above $2 trillion, according to prior Quartz coverage.
Join 500,000+ readers who start their day with Quartz.
By subscribing, you agree to our Terms of Service and Privacy Policy.