SpaceX Insider Lockups Start Expiring in July. Here Is What That Means for the Stock.
SpaceX's first IPO lockup expiration arrives in late July, but its unusual staggered structure could make insider selling far less disruptive than investors expect.
Overview
When a company goes public, it's important to know that the shares sold in the offering are a fraction of the existing shares. The rest, the stakes held by employees, early backers, and executives, sit behind a lockup -- an inability to sell for a set stretch after the debut.
For Space Exploration Technologies (NASDAQ: SPCX), the first stretch lifts in late July, and the design of the release tells you more than the date does. Most IPOs use one 180-day lockup, so a wall of shares might hit the market on a single morning.
Details
SpaceX built something different. The first slice, nearly 20% of locked shares, is freed up after the company reports second-quarter results in late July. Smaller tranches of around 7% each follow through August, September, and October, with a larger release tied to third-quarter earnings, and the 180-day batch clears in December. Instead of one flood, supply arrives in steps.
Source
Originally published at www.fool.com.