SpaceX has filed plans to allow significant portions of its restricted stock to become eligible for resale prior to the traditional 180-day post-IPO lockup, using a staggered schedule tied to company performance, according to the filing.
This arrangement departs from the typical six-month lockup that commonly follows U.S. initial public offerings. The usual purpose of a 180-day restriction is to prevent pre-IPO investors from flooding the market with shares immediately after listing, which can pressure the stock price.
Under the proposed structure, certain holders could begin selling shares as soon as the first quarterly earnings report following the IPO, provided SpaceX meets the specified performance conditions. If the company and its stock meet the applicable criteria, most of the previously restricted pool may be released over successive months. Any shares that remain under restriction after the staged releases would become eligible for sale at the end of the standard six-month period.
The filing specifies an initial allowance for resale of up to 20% of the restricted shares shortly after the company’s second-quarter earnings release. An additional 10% tranche would be unlocked only if the stock trades at least 30% above its offering price.
Further releases are pegged to a series of timing milestones: multiple 7% blocks are scheduled to become available at five discrete points between 70 and 135 days after the listing. Following another earnings report, a subsequent 28% block would be eligible for resale. Any restricted shares not previously released under these triggers would be freed at the 180-day mark.
The filing also details selling restrictions for the company’s largest holders. Elon Musk, who retains 85.1% of the voting power and 12.3% of the economic interest in Class A shares, has agreed to a 366-day restriction on selling his shares. Other major investors have committed to the same 366-day limitation.
SpaceX has not disclosed the exact number of shares subject to this staged lockup, nor the precise percentage of the total outstanding stock that would become eligible for early resale. The company is, however, targeting a valuation as high as $1.75 trillion. The filing notes that sales of even a relatively small percentage of the total could amount to tens of billions of dollars.
While staggered resale schedules are not unheard of, they remain unusual. The filing cites recent examples of technology companies that used phased structures in their public offerings. Several IPOs during the 2020-2021 period, including Airbnb, DoorDash and Snowflake, implemented phased approaches that permitted selected shareholders to sell portions of their holdings earlier than under a single 180-day lockup.
The filing also points to other recent adopters of staggered resale systems: AI chip designer Cerebras, Rubrik - which used performance-based triggers tied to stock-price thresholds and earnings timing - and hybrid mechanics applied by Reddit and Ibotta, which linked unlocks to earnings windows and blackout periods.
SpaceX’s planned scheme blends timing-based windows around earnings with stock-performance conditions to sequence release of restricted stock. The company’s filing provides the specific percentages and timing windows but does not reveal the total counts of shares covered, leaving the ultimate magnitude of early resale optionality dependent on holdings and how many shares fall within the restricted pool.
Key points
- SpaceX filed a staged resale plan that allows portions of restricted shares to become eligible for sale before the 180-day lockup ends, with unlocks tied to earnings releases and stock performance.
- Up to 20% of restricted shares could be sold shortly after the second-quarter earnings release; another 10% depends on the stock trading at least 30% above the offering price, with additional 7% tranches and a 28% block tied to timing and earnings milestones.
- Elon Musk and other large investors have agreed to a 366-day restriction on selling their stakes; SpaceX has not disclosed the total number of shares subject to the staged lockup, and the company is targeting a valuation up to $1.75 trillion.
Risks and uncertainties
- Unspecified scope of restricted shares - the filing does not disclose the total number or exact percentage of outstanding stock covered by the staged lockup, leaving uncertainty about how much potential supply could enter the market early. This impacts equity markets and IPO pricing.
- Performance triggers and timing windows create uncertainty about when and how much stock could be released, which may affect investor expectations for liquidity and share-price pressure in the months after listing. This is relevant to equity and secondary-market dynamics.
- Significant potential resale volumes - given SpaceX’s targeted valuation, sales of even a small portion of outstanding shares could translate into tens of billions of dollars, introducing uncertainty for market absorption and price stability in the equity market.