The biggest IPO in history has a hole in its safety net
SpaceX has filed for what would be the largest IPO in history. The filing is still confidential, but expect the usual: a dual-class structure, a sky-high valuation, breathless coverage of the deal size. None of that will surprise anyone. However, at the bottom of the FT’s report on the IPO is a detail that has received far less attention, and it matters more than the rest: SpaceX was toying with the idea of allowing some existing shareholders to sell down their stakes in the company on its first day of trading, according to people close to the deal. This would do away with guidelines that typically prevent insiders cashing out of their positions for 180 days after a company’s market debut. The lock-up waiver isn’t a quirk. It’s the most consequential structural decision SpaceX could make for retail investors, and doing away with it is a big deal. It would allow some insiders to dump their shares on ordinary investors as soon as it begins trading. Yet SpaceX would only be the most visible example of an insidious trend that has been quietly eroding investor protections for over a decade.