BREAKINGVIEWS-SpaceX lockups turn tsunami into constant pounding

SpaceX

SpaceX

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The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

By Robert Cyran

NEW YORK, June 8 (Reuters Breakingviews) - The company plans to sell less than 5% of its shares in its upcoming $75 bln IPO. That may leave a giant overhang of insiders desperate for their turn. Spreading exits over 16 different dates should slow the deluge, but may just replace it with chronic pain.

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CONTEXT NEWS

SpaceX, the rocket, satellite and AI company run by Elon Musk, is preparing for an initial public offering that seeks to raise $75 billion and value the firm at $1.75 trillion, Reuters reported.

The company's IPO prospectus outlines how insiders will be bound by lock-up agreements that limit selling. Musk will only be allowed to sell 366 days after the IPO. A yet-to-be-specified portion of shares held by other significant investors may also be locked up for the same amount of time.

Other insiders will also be bound by lock-up agreements that expire in multiple stages on 16 different dates.


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