SpaceX IPO: 5% of shares reserved for employees, executives' picks, with no lock-up

SpaceX plans to reserve about 5% of shares for employees and individuals designated by executives in its IPO, exempting them from post-listing lock-up restrictions.

According to a regulatory filing released on Monday (June 1), Elon Musk's space exploration company SpaceX has planned to reserve approximately 5% of shares in its Initial Public Offering (IPO) for certain employees and specific individuals designated by senior executives, and will exempt these participants from post-listing lock-up restrictions.

According to Reuters, these shares will be offered at the IPO issuance price through a "directed share program." If the reserved shares are not subscribed to in this program, the remaining portion will be transferred to the general public market for purchase by retail and institutional investors.

The filing did not disclose the final actual number of shares to be allocated, nor did it release a list of eligible beneficiaries.

The report indicates that this arrangement further demonstrates SpaceX's non-traditional approach to stock sales after listing. The company is currently seeking a valuation of approximately $1.75 trillion and is adopting equity management methods that differ from traditional corporations.

Generally, most new listed companies impose broad stock sale restrictions on insiders for about six months after listing. However, SpaceX has designed an exception mechanism for some participants and plans to adopt a phased release of restricted shares, with some releases tied to company performance and stock price targets.

Under this framework, under certain conditions, some shareholders can begin selling their holdings after the first quarterly financial report is released following SpaceX's IPO. The remaining restricted shares will be gradually unlocked in the following months and will be fully released after six months.

The filing also stated that SpaceX CEO Elon Musk holds approximately 85.1% of SpaceX's voting rights and owns 12.3% of Class A shares. He has pledged not to sell his shares for about 1 year after the company lists. Other major investors are similarly subject to a one-year sale restriction, but details of their holdings were not disclosed.

The report points out that such phased lock-up mechanisms were more common during the IPO boom of 2020-2021, with companies like Airbnb, DoorDash, and Snowflake adopting similar designs. More recently, tech companies such as Cerebras and Rubrik have continued this practice.