SpaceX Kicks Off Yet Another Potential Fleecing of Retail Investors Today, Oct. 26
SpaceX’s staggered and accelerated share lockup period for select insiders spells trouble for investors.
On October 26, SpaceX continued its unconventional approach to its initial public offering (IPO), which raised an unprecedented $85.7 billion in June. The company's shares became increasingly available for sale as insiders were allowed to trade based on earnings and time-based events. Two business days after each quarterly earnings report, up to 911.5 million shares became eligible for sale, leading to another 319 million shares becoming available on October 26.
SpaceX's IPO sold less than 5% of its outstanding shares, creating a favorable environment for its stock in the weeks following the IPO, as passive funds purchased a significant portion of the company's float. However, with each earnings and time-based insider share-unlock event, the company's float is rapidly increasing, potentially leading to wealth transfers from retail investors to SpaceX's early-release-eligible insiders.
Written by urgent.news from Motley Fool's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
