Elon Musk can’t sell a single SpaceX share for a year—and then all the locks crack open at once

The rocket maker’s gated stock-sale structure is designed to keep billions of shares from cratering the stock price.

Unless you’ve been on the moon, you know that Elon Musk’s SpaceX just pulled off the biggest IPO of all time and raised about $86 billion in its public stock offering last month. 

The reusable rocket maker did it while selling only a tiny sliver—between 4% and 5%—of its stock. The other 95%—which consists of about 12.5 billion shares—is being kept behind bars in one of the most byzantine, complicated lock-up schedules in history.

To level set, lock-up periods are standard fare following an IPO; founders, top executives, and early venture investors usually agree not to sell their shares for 180 days. The point, as IPO advisor Lise Buyer of Class V Group explains, is twofold. First, it forces the people who know the company best to hold through at least one earnings report, so they can’t dump stock on the public right before a bad quarter. Second, it sends a soothing signal during what could otherwise be a volatile and tenuous time in the life of a newly public company. 

“It’s a message to the new buyers that the people who know the company best still believe in it and are going to hang on,”  said Buyer.

But when the lock-up expires, usually right after 180 days, a glut of stock typically hits the market and puts downward pressure on the stock price. During the past decade, underwriters have pushed buzzy tech companies into adopting more staggered or shortened release dates for insiders to sell their shares, some even contingent on earnings or stock-price increases to dampen the flow. Airbnb, DoorDash, Reddit, and Snowflake all either shortened the 180 days or staggered them. 

SpaceX, however, took the flexible lockup approach, wrapped it in a puzzle, strapped it to an enigma, and sent it to live in a colony on Mars.

There are 15 dates for sales in the public markets, according to the company’s filings. For anyone who isn’t Musk or a large investor, they can sell their stock during the 180-day window as it unlocks in slices of 7% on various dates in August, September, and October and then two trading days after SpaceX’s Q2 2026 earnings, which will be its first as a public company. There’s another big tranche after its next earnings report, and then whatever is left can be sold at 180 days. There are also dates tied to other earnings releases, plus stock-price increases.

Avery Marquez, who tracks IPOs and lock-up structures as director of investment strategies at Renaissance Capital, described just how much of an outlier this is: “This is one of the most complicated, if not the most complicated lock-up we’ve ever seen.”

Buyer said she’s never seen such a large percentage of a company’s stock unlock before 180 days are up. 

“This is outside the bounds of anything we’ve seen before,” she said. “I would expect their transfer agent will be doing shots of tequila, because it’s going to be a little hard to manage,” she joked.

Why build a lock-up schedule this complicated? Buyer and Marquez said it’s designed to keep the billions of shares behind bars from flooding the market all at once.

To do so “could be catastrophic to the share price if everybody wanted to sell,” said Marquez.

Hans Tung, managing partner at Notable Capital and an early SpaceX investor through a company that was acquired by the rocket maker, said the schedule reads as an attempt to let shareholders ease out rather than see everything sold at once. Some will keep holding the stock “because that’s how they compound over a long period of time,” while others who got in during the past five to 10 years will probably sell to show some liquidity, he said.

“I think this series of steps is designed for most shareholders to sell a bit each time,” said Tung, whose fund has a small stake in SpaceX and a much larger position in Anthropic, which is also provides compute to SpaceX.

Tung said he doesn’t have inside information, but he noted that Anthropic and OpenAI, given their size, could end up adopting lockups similar to SpaceX if they go public.

“The amount of money involved is just very big. So some people need to have exits along the way,” he said. This is designed so that it’s done over tranches instead of a free-for-all with a six month lockup and thereafter, everybody just do whatever they want.”

There’s is another reason that could keep investors holding the stock, rather than selling right away, added Tung. The public market listing is the start of a new phase for SpaceX. And Musk’s xAI, which is part of SpaceX, is likely to acquire some companies.

He pointed to Cursor, the AI coding startup that SpaceX inked a compute deal with prior to the IPO. Days after the listing, SpaceX exercised an option to buy Cursor for $60 billion in SpaceX stock.

Now that SpaceX is public, Musk has a liquid currency to fund more deals like this, Tung said—and “as he acquires more companies, it will be adding more value to the stock, so [investors] will hold on for even longer.”

SpaceX has had a stunning trajectory in its brief time in the public market. The stock, which priced at $135 in the IPO, opened up at $150 on its first day trading and surged all the way to $226 per share in the following days. While it has since given up some of those gains, the stock now trades at roughly $162, giving SpaceX a $2.61 trillion market cap.

And then there’s Musk

There’s a wildcard in the mix. Musk holds roughly 6.4 billion shares making up about 82% of the voting power at SpaceX between his Class A and Class B supervoting 10-shares-in-one stock. Musk can’t sell for 366 days, and there are no early-release provisions at all. But then in one shot, everything unlocks at once.

Musk’s unusual lock-up structure presents investors with a case of extremes, giving the stock a ballast of stability for the first year, followed by the potential for a supernova event. While it’s almost inconceivable that Musk would choose to sell all his shares at that point given the negative signal it would send and the resulting impact on the company, the risk factor can’t be discounted.

Musk’s track record with his Tesla stock may provide some indication of what to expect. Musk has held onto his stake in the electric carmaker and borrowed against it, avoiding the capital gains tax hit he would face. He has sold Tesla stock only as a last resort. 

Jay Ritter, an IPO expert and University of Florida professor, said he wouldn’t be surprised if Musk doesn’t sell any SpaceX stock at all. 

“He doesn’t have to worry where his next meal is coming from, and if he does, it’s probably going to be a tiny fraction of the, what, 6 billion shares that he owns,” said Ritter.

Musk might even buy more of SpaceX’s, Marquez speculated.

“It’s possible we could see him buy shares when these are released. People start selling them, and he buys them up,”  she said. “With Elon Musk, anything is possible.” 

Tung doesn’t expect Musk to jump in right away, but wouldn’t rule out buybacks down the line.

“I don’t think he will buy immediately, but I think over the course of the next five to 10 years, he will buy some [stock] back when he feels it’s the right thing to do,” he said. “He is who he is, and he’s been doing this for a long time. I don’t see any reason why he would behave differently.”

Buyer, who also declined to guess at Musk’s plans, said the same. 

“He has no use for the cash, and I’m sure he believes that the stock is undervalued,” she said. “He might not sell a single share.”

Whether Musk’s investors can do the same remains to be seen.

This story was originally featured on Fortune.com