Bond.az -- SpaceX plans to allow a large portion of its shares to become eligible for resale before the usual six-month restriction period following its initial public offering, under a staged system tied to company performance, according to a company filing.
The approach marks a departure from the standard 180-day lockup that has been common in U.S. public offerings. Most companies restrict pre-IPO investors from immediately selling shares to avoid destabilizing the stock price.
The structure will allow certain shareholders to sell stock as early as after the company's first quarterly earnings release following the IPO, if SpaceX performs well. If the company and its stock perform well, most of the restricted pool could become eligible for sale over the following months, with any remaining shares unlocked at the end of the six-month period.
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Under the plan, up to 20% of the restricted shares can be sold shortly after the second-quarter earnings release. An additional 10% is contingent on the stock trading at least 30% above its offering price.
Further blocks of 7% are scheduled to become available at five points between 70 and 135 days after the listing, followed by another 28% after a subsequent earnings report. Any shares not already released would become eligible at the 180-day mark.
Elon Musk, who holds 85.1% of the voting power and 12.3% of the economic interest in Class A shares, has agreed to a 366-day restriction to sell his shares, according to the filing. Other significant investors have also agreed to not sell their stocks for 366 days.
SpaceX has not yet disclosed the total number of shares subject to the staged lockup or the exact percentage of outstanding stock eligible for early release, but the company is targeting a valuation of as high as $1.75 trillion - sales of even a small percentage of shares could represent tens of billions of dollars.
