Dear Reader,
This is Dylan Jovine with Behind the Markets.
Happy Monday. Today is Monday, June 1st. Welcome to June. On and on we go — we made it to another month together.
Today I want to walk you through some important details from SpaceX's IPO filing that I think you need to know.
Who's Running the Deal
Goldman Sachs has won the lead role — the top spot, the big dog position.
Morgan Stanley, Bank of America, Citi, and JPMorgan are also listed in senior roles.
Importantly, Morgan Stanley has been named the stabilization agent — a very coveted role that oversees the early hours of trading and makes sure the stock gets off to a smooth start in the public market.
Think about what that actually means.
When a company goes public, you have a book of buyers on one side and sellers on the other.
You can't just let that play out electronically — it'll blow up in unpredictable directions.
You have to manage the release.
Match the buying demand to the selling supply.
Keep the price stable while the market finds its footing.
It's manipulation — and it's supposed to be.
When Goldman and Morgan Stanley are running a deal together, you're watching the best in the business do what they do.
It's going to be an elegant dance.
The Lockup Ladder
This is where it gets interesting.
Most companies that go public have a standard 180-day lockup — insiders and long-term holders can't sell their restricted stock for six months.
Plenty of investors make a living just watching that lockup expire and shorting the stock right before it does, because when insiders start selling, prices typically go down.
SpaceX is doing something different.
They're allowing employees to sell portions of their holdings well before the traditional 180 days.
Current and former SpaceX employees will be able to sell up to 30% of the shares set aside for them by the fall — roughly three months after the IPO instead of six.
Another 20% can be sold after the first earnings release.
Another 20% if the stock is trading 30% above the IPO price.
Additional tranches of 7% can be sold in regular increments between 70 and 135 days post-IPO, and another 28% after the third quarter earnings period.
What this means practically is that a lot of stock is going to hit the market from employees who have been grinding for this company for almost 20 years.
That's not a bad thing — they earned it.
But it does mean the stabilization job is even more complex than usual.
Managing that additional supply while keeping the stock healthy is a real challenge.
To his credit, Musk has agreed not to sell any shares until at least a year after the IPO.
Certain large investors have agreed to similar terms.
Where to Get SpaceX Shares
For those interested in buying at the IPO price, the filing lists the following platforms:
Robinhood, SoFi, Charles Schwab, Fidelity, and Morgan Stanley's E-Trade.
If you have an account at any of those and you want a shot at shares at the IPO price, call your rep now and let them know.
Anything can change, but by the time something makes it into the filing, it's largely a done deal.
One Final Note
I will not be here the rest of this week — we have some great content planned for you in my absence.
I'll see you next week.
Have a wonderful day and a wonderful week.
“The Buck Stops Here,”
Found this helpful? Share it with others.
Written by Dylan Jovine