Scottish Mortgage Share Price (SMT)

This is the lock up schedule (from Claude):

After Q2 earnings (the first results as a public company), up to 20% of eligible shares unlock. If the stock is also trading 30%+ above the IPO price at that point, an additional 10% can be sold.

Five time-based tranches at 70, 90, 105, 120, and 135 days post-IPO each release another 7% of eligible shares.

A further 28% unlocks after Q3 earnings, and the full remainder at the standard 180-day mark.

Musk can’t sell anything for 366 days.

There is no secondary offering.

“Why not just sell as much of their holding as possible into that market?”

In any IPO the company makes a “primary offering” that sells new shares, which dilute existing holders but adds at money raised to the assets.

The is usually a “secondary offering” that allows existing holders to sell *a very limited number* of their shares. This is to prevent the market being flooded with shares and tanking the share price.

The existing shareholders are subject to a lock up period of typically six months before they can sell any more shares.

So, the short answer to your question - via a long explanation - is that THEY CAN’T SELL (very much if any) at the time of the IPO.

Why would the managers hold SpaceX if the float price on the open market is significantly higher than what they consider fair value? Why not just sell as much of their holding as possible into that market?

Fela96 - the managers could choose to hold SpaceX at a discount if their view is that it’s the likely price level once their lock in expires.

Times article this morning says Morningstar, which is independent, values SpaceX at$780bn and says that they are near term over-valued.