Inside SpaceX Stock Deals: How Employees and Investors Benefit
Internal SpaceX documents have revealed how the company offers stock deals to employees and major investors such as Andreessen Horowitz (a16z) and Gigafund.
Employee Stock Cash-Outs
SpaceX provides its employees the chance to cash out some of their shares by selling them to company-authorized outside investors. An internal SpaceX document from May 2022 shows that investors paid $70 per share to employees. This price is significantly lower than the $270 per share paid during the primary sale in 2022. The difference in price is because employees hold common stock whereas investors usually buy preferred stock that comes with dividends and liquidation preferences.
Preferred vs. Common Stock
As of 2022, if SpaceX were to sell itself, the first $6.67 billion would go to preferred shareholders. This figure increased by $750 million due to later investments. However, if SpaceX maintains its current $137 billion valuation, these preferences won’t impact common stockholders significantly.
Stock Split and Future Tenders
In February 2022, SpaceX conducted a 10-for-1 stock split of its Class A, B, and C common shares. The $70 per share price provided a better deal over a previous $56 tender offer. Future tenders may see prices ranging from $108 to $110 per share.
Authorized Investors
Only a select few investors are authorized to buy shares:
- Andreessen Horowitz (a16z): Authorized to buy nearly 4.3 million shares for almost $300 million. The firm joined SpaceX's cap table with a $250 million raise in August 2022 and led a $750 million round in 2023.
- Aliya Capital Partners: Authorized to buy over 1.4 million shares for nearly $100 million, connected with Aliya Growth Fund.
- Gigafund: Allocated over 1.4 million shares for nearly $100 million; cofounder is on the SpaceX board.
- 137 Ventures: Authorized to buy just under 1.1 million shares for nearly $75 million, associated with 137 Holdings.
- Point 2 Prove Investment: Allocated 1 million shares costing $70 million.
- Atreides Management: Associated with Atreides Special Circumstances Fund, allocated nearly 429,000 shares at nearly $30 million.
- TCP Exploration Fund 2022: Connected with Troy Capital Partners, allocated over 357,000 shares for nearly $25 million.
Two additional investors were given authorization to buy another $50 million in shares combined.
Lack of Response
Neither SpaceX nor the specified funds, except for Atreides, responded to requests for comment on the matter.
By these practices, SpaceX creates opportunities for its employees and selected investors to benefit from the company's growing valuation, ensuring a dynamic and appealing investment landscape.
