In a break from the conditions attached to other insiders, SpaceX founder Elon Musk appears to have agreed to have his stock locked up for 366 days: one year and one day.
Under the circumstances, the billionaire will be unable to do essentially anything other than hold the equity unless permitted by the underwriter – Goldman Sachs (NYSE: GS) in this case – which is an unlikely eventuality, and he will not benefit from the uncommonly generous release terms for other early backers.
While the commitment represents, on the one hand, a strong show of confidence in the performance of SpaceX shares once they launch on the Nasdaq under the SPCX following the June 12 initial public offering (IPO), Musk’s track record shows the decision is unlikely to be consequential for him.
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Specifically, examining the SEC filings pertaining to Tesla (NASDAQ: TSLA) – the billionaire’s only publicly traded company at press time on June 3 – reveals no selling activity since 2022, with the most recent, $3.5 billion trade being related to the Twitter – now X – acquisition.
Why there will be little price discovery ahead of SpaceX stock inclusion into indices
Elsewhere, Elon Musk’s commitment not to sell any SpaceX stock before June 13, 2027, only partially alleviates the concerns arising from the circumstances of the IPO.
The most controversial aspect of the offering is that the recent changes implemented by entities such as Nasdaq have effectively removed the ‘seasoning’ period, enabling exceptionally large new public companies to join the major indices within weeks.
Such a move was met with alarm by some observers since it is likely to prevent SpaceX from settling into a ‘fair’ price by replacing months of price discovery with immediate and large-scale demand from index-tracking investment vehicles.
SpaceX insiders benefit from generous stock sale conditions
Furthermore, the exceptions described with the SEC filing – exceptions Musk will, admittedly, not benefit from – appear like they will create conditions for insiders to sell into the peak of automatic buying.
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According to the document, the initial batch of shares will be unlocked shortly after the release of the quarterly filing covering the period ended June 30, 2026.
On or after the second full trading day on Nasdaq immediately following the public release of our quarterly financial results (which for this purpose does not include “flash” numbers or preliminary, partial earnings) for the quarter ended June 30, 2026 (such date, the “First Earnings Release Date”), up to 20% of the Early Release Eligible Shares may be transferred;
Considering the typical deadlines, the exception means that insiders will be able to sell up to 20% of their stake less than two months after the IPO, with the percentage increasing should the equity rally more than 30% from its initial price and remain elevated for five consecutive trading days.
The fast-track inclusion into the Nasdaq-100 all but guarantees a significant initial rally, especially with the low float during the summer.
if the reported closing price of our Class A common stock on Nasdaq is at least 30% greater than the public offering price set forth on the cover page of this prospectus for at least five of the ten consecutive trading days ending on, and including, the First Earnings Release Date,, on or after the second full trading day immediately after the First Earnings Release Date, up to additional 10% of the Early Release Eligible Shares may be transferred;
Lastly, the initial release will be followed by subsequent ticking batches after 70, 90, 105, 120, and 135 days have elapsed, and even more shares will become tradable after 180 days, and after the filing covering the quarter ending on September 30.
Nvidia CEO believes SpaceX could be among the top investments of 2026
Elsewhere, despite the design of the SpaceX IPO having some observers alarmed, multiple prominent voices remain highly optimistic about the firm.
Perhaps the strongest endorsement of investing in the firm came on June 1 when, in a live appearance on CNBC, Nvidia (NASDAQ: NVDA) CEO Jensen Huang opined that backing the firm early could be akin in returns to buying Amazon (NASDAQ: AMZN), Google (NASDAQ: GOOGL), or Meta (NASDAQ: META) shortly after their own initial offerings.
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