SpaceX Staff Face the Lock-Up Question: Sell Most, Research Says

SpaceX employees are about to confront a question every concentrated stockholder eventually faces: hold or sell? Shares priced at $135 in the IPO, surged to $225 within days, then slid back to roughly $139, only about 3% above the offer price. When the lock-up expires, how much should staff unload?

Investor and writer Nick Maggiulli, in a post on his Of Dollars and Data blog, argues the answer for most employees is simple: sell almost everything and diversify. His case rests on a body of research that is unkind to concentrated bets.

Jay Ritter's dataset of more than 9,200 IPOs from 1980 to 2024 shows newly listed firms trail similar-sized public companies by 5.8% in their first year. Much of that lag lands in the six months after the lock-up ends, exactly the window SpaceX staff are entering. The pattern is not limited to IPOs. Antti Petajisto of Brooklyn Investment Group found the median individual U.S. stock since 1926 trailed the broad market by 7.9% over ten years, or about 0.82% a year. The average stock only keeps pace because a handful of giant winners drag it up. Hendrik Bessembinder's work shows the best-performing 4% of listed companies account for the entire net gain of the U.S. market since 1926.

Maggiulli lays out several exit paths. Selling everything maximizes the median outcome. Selling a large chunk now and the rest in tranches can cut taxes, as can selling only as fast as direct-indexing losses allow. A 50/50 split is a rough regret minimizer, in the spirit of Harry Markowitz's own portfolio. A fixed schedule, such as half now and 10% a year for five years, removes emotion from the decision. His favorite is the lifestyle floor: sell enough to lock in a wealth level, then let the remainder ride as a moonshot. Someone with $5M in one stock might sell $3M and keep $2M exposed.

What does that mean for the typical SpaceX worker? Using the New York Times figure that more than 4,400 current and former employees could become millionaires, including about 400 worth $100M or more, and a Pareto distribution across 22,000 staff, Maggiulli estimates the typical holding at about $100k at the IPO price. That peaked near $167k and now sits around $103k.

At that size, he says, tax-spreading strategies save little, since salary already fills the lower brackets. The wealth-level approach also fits poorly, because the typical employee is likely already past $100k in net worth, and a company valued above $1T is unlikely to rise tenfold. His conclusion is to sell nearly all of it.

The advice is a modeled estimate, not a figure from SpaceX, and employees with far larger stakes face a different calculation. But the broader point holds for anyone sitting on RSUs or a big winner in a taxable account: work out what selling locks in and what holding could realistically add. Most of the time, Maggiulli notes, the exercise says to sell more than you would like.