SpaceX SPV investors won't know their true holdings until post-IPO lock-ups lift
Many people who bought into SpaceX through special purpose vehicles will not learn how many shares they actually own until well after the company's public debut, because those vehicles were stacked four or five layers deep. Each layer adds a 30-day window to pass shares down the chain, so the lowest-tier backers might wait eight to nine months after lock-ups lift before real shares reach their accounts. Manager fees shrink final holdings at every level, and a few vehicles could turn out to be fraudulent.
Key Takeaways
- After SpaceX makes its public debut, lower-tier SPV investors face hidden fees, lengthy payout delays, and the risk of outright fraud.
SpaceX makes its public debut on Friday and some investors who backed the company through special purpose vehicles (SPVs) still don't know how many shares they're entitled to or whether they'll get any shares at all.
- In recent months, Anthropic and Anduril have announced that they are disallowing these structures.
Nearly a dozen SPV managers and secondary market investors who spoke to TechCrunch said that backers in lower-tier vehicles might find they own fewer shares than they think or, in rare cases, that they may not receive any shares at all.
- Consequently, the next layer down likely won't get its shares for as long as 30 days, meaning the vehicle below that must wait even longer to deliver stock to its own backers.
For the final disbursement, the bottom SPV layer may have to wait eight or nine months, Ernest estimates.
- The biggest concern for downstream SPV investors is that they may not get any shares in SpaceX.
Giovanni Pennetta, the manager of Sestante Capital, was recently sentenced to four years in prison for fabricating access to non-existent allocations in the defense tech company Anduril.
- He wrote that the investor hasn't heard from the SPV manager for a year.
Stats & Key Facts
- #The first-layer SPV will have 30 days to distribute stock to its investors, said Justin Ernest, founder and managing partner of Sabertooth Capital , a firm that invests primarily in first-layer SPVs.
- #"A friend just shared in confidence - they bought SpaceX through a 2 layer SPV in 2021.
After SpaceX makes its public debut, lower-tier SPV investors face hidden fees, lengthy payout delays, and the risk of outright fraud. SpaceX makes its public debut on Friday and some investors who backed the company through special purpose vehicles (SPVs) still don't know how many shares they're entitled to or whether they'll get any shares at all. Investing through SPVs, where multiple parties pool their money to invest in a single company, has been around for a while.
But SpaceX represents an unprecedented case of an IPO with multiple layers of these vehicles. Since demand for SpaceX allocations has been so high in recent years, investors in an SPV have occasionally formed a new SPV from their shares, creating a structure sometimes stacked four or five layers deep. SpaceX will be the first major test of the legitimacy of multi-layer SPV.
In recent months, Anthropic and Anduril have announced that they are disallowing these structures. Nearly a dozen SPV managers and secondary market investors who spoke to TechCrunch said that backers in lower-tier vehicles might find they own fewer shares than they think or, in rare cases, that they may not receive any shares at all. In most situations, these investors won't learn how many SpaceX shares they actually own until the company's rolling lock-ups, scheduled to take place over about four months, begin to lift.
For more details please read the original article at TechCrunch AI.
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