Post-IPO Lockup & Release Schedule
Following the IPO, your restricted SpaceX shares will not be immediately available for sale. Based on the terms described in the S-1 filing, shares are released in eight tranches over approximately six months. Some tranches unlock on fixed calendar days after the IPO date; others are tied to SpaceX's quarterly earnings releases — meaning the exact date depends on when those results are published. Please see our share release tracker for more details.
Strategies for thoughtfully reducing your concentration over time.
Knowing when your shares unlock is only part of the equation. The more important question is what to do with them — and when. The five strategies below represent the primary approaches available, ranging from a simple sale to sophisticated tax-deferral structures. Each involves tradeoffs. In some cases, the right answer may be a combination of several, coordinated with your tax advisor and implemented in stages across the lockup period and beyond.
Direct Sale
The most direct path: sell some or all of your SpaceX shares and redeploy the proceeds into a diversified portfolio. Once public, sales will be subject to a multi-tranche lockup — meaning shares become available to sell in stages over approximately six months post-IPO, not all at once. After each tranche releases, shares can be sold through your brokerage account. Sales can be executed all at once within each tranche or staged across multiple years to spread the tax impact.
How It Works
Advantages
- Simplest and most immediate path to diversification
- Eliminates concentration risk in one step
- No ongoing hedging costs, premiums, or structural complexity
- Can be staged across multiple years to soften the tax impact
- Transparent public market pricing once each lockup tranche releases
Disadvantages
- Triggers capital gains liability.
- If SpaceX continues to appreciate, you forfeit future upside
Dynamic Hedging
Hedging uses options contracts — financial agreements that grant the right to buy or sell stock at a set price — to protect your SpaceX position against a significant decline without requiring you to sell your shares. Once SpaceX goes public, exchange-listed options will become available. These strategies range from simple single-option protection to more complex multi-leg structures, and can be tailored to your risk tolerance.
B — i
Protective Puts
A protective put works like an insurance policy for your shares. You purchase a put option that grants the right to sell your SpaceX shares at a pre-agreed "strike price," regardless of how far the stock may fall. If the stock drops below that price, your put gains in value, offsetting the loss. If the stock rises, you participate fully in the upside — minus the cost of the option premium.
Protective Put — Payoff at Expiration
The put option creates a floor on losses (green zone) while leaving upside fully intact above the strike price. The cost is the option premium paid upfront.
Advantages
- Establishes a floor — worst-case loss is defined and known
- Preserves 100% of upside potential above the strike price
- No forced sale of shares — you retain your SpaceX position
- No capital gains tax event from the hedge itself
- Can be renewed or resized as your situation evolves
Disadvantages
- Option premiums can be significant — SpaceX is a high-profile, volatile stock
- Protection expires and must be continuously rolled forward.
- Does not reduce concentration risk — your position remains entirely in SpaceX
- Premium paid is a sunk cost even if the stock rises
B — ii
Protective Collar
A collar adds a second options layer to the protective put: you simultaneously buy a put option (protecting the downside) and sell a call option (capping the upside). The premium income from selling the call offsets part or all of the put cost, making this strategy often achievable at little or no net cost. In exchange, gains above the call strike are forfeited.
Protective Collar — Payoff at Expiration
The collar defines a bounded range of outcomes. You are fully protected below the put strike (green) and you give up gains above the call strike (blue). Often structured at near-zero net premium cost.
Advantages
- Can often be structured at zero net premium — call income offsets put cost
- Defines a clear, predictable range of outcomes
- Protects downside without requiring a sale of shares
- No taxable event from the collar itself
- More affordable than standalone protective puts
Disadvantages
- Forfeits all appreciation above the call strike price
- Large collars may need to be structured in multiple tranches to minimize market impact
- More moving parts than a simple put or outright sale
- Concentration risk remains
B — iii
Additional Put/Call Strategies
Beyond the two structures above, a range of more sophisticated options strategies can be layered in depending on your risk tolerance, outlook on SpaceX, and desire for flexibility. The four below are presented in increasing order of complexity.
Sell call options against your existing shares to generate premium income. You give up appreciation above the call strike but receive cash now. Useful when you don't expect significant near-term upside and want to reduce your effective cost basis over time.
Buy a put at a higher strike price and sell a put at a lower strike price simultaneously. The short put premium reduces your net cost, but also caps the maximum protection at the spread width. A cost-effective way to guard against moderate declines.
Combines a collar with an additional put spread: buy a higher-strike put, sell a call, and sell a lower-strike put. Reduces the net premium further while maintaining full protection between the two put strikes. Best for clients who need near-zero cost and can tolerate risk below the lower put.
A forward contract that provides immediate cash (typically 75–90% of current share value) while deferring the taxable event to a future settlement date. At maturity, you deliver shares or the cash equivalent. This is a complex structure.
General Advantages
- Highly customizable to risk tolerance and risk appetite
- Can generate premium income to partially fund protection costs
- No forced sale of shares; tax event deferred
- Strategies can be layered or adjusted as the situation evolves
General Disadvantages
- Complexity — and the margin for error — increases with each added leg
- Some multi-leg structures (e.g., prepaid variable forwards) still require institutional counterparties
- IRS may recharacterize certain structures as constructive sales
- Ongoing monitoring, rolling, and coordination with your CPA is essential
Long/Short Overlay
This strategy builds a diversification portfolio alongside a collared SpaceX position. Roughly 30% of the overlay is invested long in a basket of stocks; another 30% is shorted (borrowed and sold) in a separate basket. When short and/or long positions decline, the resulting tax losses can be harvested to offset capital gains from selling SpaceX shares — enabling gradual, tax-managed diversification over time without triggering one massive tax event.
Portfolio Structure at a Glance
As short positions generate tax losses and SpaceX shares are gradually sold, proceeds are reinvested into the long basket — systematically building diversification over time.
Advantages
- Tax losses from shorts and/or longs can offset a significant portion of SpaceX gain taxes
- Enables gradual diversification without a single large tax event
- Begins building a diversified portfolio
- Collar on SpaceX provides downside protection during the transition period
Disadvantages
- Short positions carry theoretically unlimited loss potential if shorted stocks rise
- Stock borrowing fees (borrow costs) reduce net returns on the portfolio
- Requires active, ongoing monitoring and rebalancing of both baskets
- Short basket must be thoughtfully constructed to actually generate losses — no guarantee
- High complexity — requires experienced management and close CPA coordination
Exchange Fund
An exchange fund pools concentrated stock positions from multiple investors into a single diversified fund. You contribute your SpaceX shares — without selling them — in exchange for shares of the fund, which holds a broad mix of holdings from other contributors. The IRS treats this as a non-taxable exchange under certain conditions, deferring all embedded capital gains until you eventually sell your fund shares.
How the Exchange Fund Works
Contributed at original cost basis
Concentrated position
Concentrated position
Advantages
- Tax-deferred — no capital gains tax recognized at contribution
- Achieves diversification without a taxable sale
- Original cost basis carries forward to your fund shares
- A well-established and IRS-recognized structure with a long track record
Disadvantages
- Seven-year lock-up is required by the IRS with liquidity constraints.
- You relinquish future SpaceX-specific upside upon contribution
- To retain tax-free status, at least 20% of portfolio must be invested in qualifying assets (typically real estate)
- Fund performance depends on what other investors contribute
- Fund sponsors may cap how much of any single stock they accept
Section 351 Exchange
A Section 351 exchange allows investors to contribute appreciated securities to a newly created exchange-traded fund (ETF) in a tax-deferred transaction under IRS rules. The ETF is structured to hold the contributed assets and carries over your original cost basis.
Section 351 — Structure at a Glance
Assets You Contribute
Tax-Free
Contribution
What You Receive
Mirrors contributed assets
Original cost basis preserved
Sell shares gradually over time
constraint: No single security can represent more than 25% of the total assets transferred. If SpaceX is your only concentrated holding, additional appreciated securities must be sourced from other accounts or investors to meet this threshold before the structure can be used.
Advantages
- Tax-deferred — no capital gains recognized at the time of contribution
- Results in a liquid, publicly traded ETF (unlike an exchange fund's 7-year lock-up)
- Original cost basis carries forward, allowing future tax management on your timeline
- Achieves diversification through the ETF's structure
- ETF shares can be sold incrementally over time to manage the ultimate tax liability
Disadvantages
- SpaceX cannot exceed 25% of the contribution — additional assets must be sourced
- Complex and expensive to structure — requires specialized legal, tax, and compliance teams
- Requires coordination with other investors or holdings to meet the diversification threshold
- Limited number of firms offer this structure; access may be restricted or waitlisted
- IRS scrutiny of §351 transactions is elevated — precise documentation is essential