SpaceX bankers game plan to blunt post-IPO selling tsunami
Semafor • • business
Key Points:
- SpaceX’s upcoming IPO faces heightened lock-up cliff risks due to less than 5% of its stock being floated, far below the average 20%, creating significant pent-up selling pressure.
- The company’s long fundraising history of about 18 years means many investors hold substantial unrealized gains, which could trigger large sell-offs when lock-ups expire.
- Similar challenges are anticipated for other major tech IPOs like OpenAI and Anthropic, prompting Wall Street to explore new solutions to manage lock-up expirations.
- Elon Musk has previously considered selling some of his estimated 40% stake in SpaceX but has not done so, adding uncertainty to potential share supply post-IPO.
- Past IPOs like Alibaba and Datadog have experimented with staggered or conditional lock-ups to mitigate selling pressure, while some banks have waived lock-ups entirely, though this carries reputational risks as seen with Beyond Meat.
