Like numerous highly esteemed startups, LinkedIn generally permits its authorized outside traders to access the company.
TechCrunch has obtained an internal document detailing this emerging provider from May 2022. In his typical transparent manner, Elon Musk revealed last month that SpaceX conducts significant stock sales by its employees roughly every six months.
These documents offer intriguing glimpses into the profiles of license holders authorized to acquire secondary securities and the exceptional opportunities that come their way.
The company provided its employees with a payment of seventy dollars per share, as documented in the relevant records. That’s a substantial discount compared to the share costs traders incur when investing in primary offerings – where companies sell shares directly to raise capital.
Shares sold for $270 throughout the primary offering in 2022. SpaceX has not priced a major public offering above $70 per share since its pre-IPO round, Collection G, which was valued at $77.46 per share, according to the filings. In 2015, our response to PitchBook’s request for information was timely and comprehensive.
Ultimately, the primary goal of these funds’ low costs is that investors who participate in initial public offerings typically invest in popular stocks that grant them dividend payments and priority claims on assets upon dissolution. Investors are typically entitled to receive their investment back with a gain, should the company undergo a sale or merger.
As of 2022, documentation suggests that in the event of a SpaceX IPO, approximately $6.67 billion would be owed primarily to its most prominent shareholders. Since then, the corporation has mandated a minimum increase of at least that amount, effective from the initial payment made to traders. Shouldn’t SpaceX’s substantial valuation be a concern for employees and other ordinary stockholders if it is contingent on these liquidation preferences, prioritizing payouts to investors? When a corporation undertakes an under-$7 billion asset sale, it is possible that widespread shareholders could potentially receive little to no compensation.
As of 2019, internal documents reviewed by TechCrunch revealed that SpaceX had never distributed any dividends. When the board of administrators deems it necessary to distribute dividends, payments will be made in fixed amounts tied to the dates when investors acquired their shares. Prices range from a few cents per share for early, budget-friendly purchases to over $10 per share for those acquired in more expensive, later rounds.
The communication regarding employee shareholdings in 2022 proved exceptionally beneficial for the workforce. In February 2022, SpaceX underwent a significant corporate event, splitting its Class A, B, and C common stock on a 10-for-1 basis. The most sought-after stock did not experience a split. The documentation fails to specify the distinct differences between various classes of common stock? In publicly traded companies, distinct classes of shares often possess varying levels of voting power. One type of share held by a company’s founder may carry a unique voting mechanism, entitling them to ten votes per share, thereby ensuring continued control over the organization while allowing for share issuance and liquidity events.
It remains unclear whether and when SpaceX will pursue an initial public offering (IPO). Secondary market transactions are often a vital means for employees to purchase company stock.
Another key point workers needed to know about this sale was that the $70 per share value represented a significant improvement over the previous tender of $56, when accounting for the stock split; it was also noted that the next tender offer could potentially reach values of $108 to $110 per share.
Which traders received to purchase?
Among the most striking discoveries in these documents was the stark reality that only a tiny fraction of traders were listed as authorized buyers. Many investors in the company have orbited around SpaceX, making them either ardent supporters of its founder Elon Musk or having historically distant connections with him.
They have been:
And Andreessen Horowitz (a16z) secured a license to acquire approximately 4.3 million shares for just under $300 million. Although Andreessen Horowitz (a16z) is not a traditional long-time major investor in SpaceX, it surprisingly secured a significant spot on the company’s capital desk according to PitchBook. Additionally, it secured the role of lead investor in SpaceX’s $750 million funding round, valuing the company at $137 billion as of 2023.
Andreessen, the co-founder of the agency, has had a long-standing respect for Musk, stemming from their shared presence in Silicon Valley’s tech elite. In recent years, he has transformed into a vocal admirer of Elon Musk, enthusiastically praising the innovative endeavors of SpaceX, Tesla, and X by frequently expressing his admiration through various means, including applause. Andreessen engaged in a public debate with Vinod Khosla, his billionaire and rival VC, over SpaceX’s X.com platform after Khosla publicly praised OpenAI, which he backs; the controversy ultimately caught Musk’s attention.
The Aliya Progress Fund, a significant entity, was granted a license to acquire approximately 1.4 million shares at a value of around $100 million. The Aliya Institute is a leading household employer in Miami, boasting an impressive portfolio with SpaceX as one of its most significant investments. Aliya, a prominent investor, holds significant stakes in several prized startups, including Determine AI, Unattainable Meals, and Anduril. Notably, it contributed $360 million when Elon Musk acquired Twitter in 2022 for $44 billion. Despite Musk’s swift decision to cut Twitter’s headcount, Aliya remained publicly optimistic about the platform’s future. “We expect Twitter to deliver a four-to-fivefold return within just a few years, with similarly limited drawback risk,” said Aliya Chief Executive Ross Kestin to Reuters in December 2022.
Aliya additionally fortunately champions SpaceX. In April, as the company continued to incur losses, Aliya reaffirmed its commitment to Elon Musk’s ambitious vision by doubling down on his innovative ideas. A staggering 500,000 new Starlink subscribers have signed up within just four months, a non-coincidental achievement that demonstrates incredible momentum, with over 2.7 million subscribers now on board. This masterpiece of creative vision and meticulous craftsmanship serves as an enduring testament.
The company, co-founded by a member of the SpaceX board, granted more than 1.4 million shares to itself at an approximate value of $100 million. Gigafund was co-founded by Luke Nosek, a fellow PayPal alumnus and colleague of Peter Thiel’s partner at Founders Fund, where the latter is based. As co-founders of PayPal, Thiel and Musk share a strong entrepreneurial bond, their partnership forged in the early days of digital payments. As Founders Fund’s representative, Noah Nosek spearheaded the initial venture capital investment in Area X, joined the company’s board of directors, and has maintained his position there continuously since then. As co-founder of Gigafund, Stephen Oskoui, a former Founders Fund investor, has leveraged his connections to secure investment opportunities with multiple Elon Musk-backed entities, including Neuralink and The Boring Company.
Is closely tied to 137 Holdings, having been granted a license to acquire approximately 1.1 million shares at a price tag of nearly $75 million. 137 Ventures is a venture capital fund that stands out due to its unique characteristics. While working together at Founders Fund, founders Justin Fishner-Wolfson and Alex Jacobson collaborated on the firm’s investment in SpaceX. When Musk first approached Thiel and Founders Fund to back his new rocket company, initial funding for SpaceX was slated at around $5 million; however, Fisher-Wolfson convinced them to increase the investment significantly. While having continued to assume large stakes in diverse SpaceX funding rounds sourced from various investment firms, Fishner-Wolfson guided TechCrunch’s Connie Loizos in a conversation dating back to 2020. In 2011, he founded 137 Ventures.
Was allocated 1 million shares, valued at $70 million. The Level 2 Show seemingly revolves around a high-tech, goal-oriented vehicle, allegedly backed by a mysterious global funding entity, with updates tracing back to July 2022. Was founded by Alexander Tamas, a child of Yuri Milner’s Digital Sky Technologies (DST). Tamas may not publicly vocalize his opinions, yet his company has silently backed Elon Musk’s Twitter acquisition with a substantial $700 million investment. Furthermore, Tamas’ firm also holds a significant stake in SpaceX and has invested in various other Musk-backed ventures, including Boring and Neuralink. The venture capital firm’s founder, Tamas, is credited with securing early investments in companies such as Facebook, Airbnb, Spotify, Twitter, Alibaba, and other prominent startups? Marc Andreessen and his venture capital firm co-founder Ben Horowitz have previously characterized Tamas as saying to Bloomberg that: “Tamas is literally on speed dial for everyone trying to build the most successful, high-scale global web companies today.”
Established in connection with the Atreides saga, a specific fund was allocated approximately 429,000 shares at a valuation of around $30 million. Gavin Baker, founder of Boston-based hedge fund Atreides Management, takes another swing at SpaceX. Prior to founding Atreides in January 2019, Gavin spent nearly two decades at Constancy, ultimately overseeing the $17 billion Constancy OTC Fund. During his tenure, he made his initial investment in SpaceX and went on to see it become Atreides’ largest portfolio company among its venture capital fund by 2022? As of the current year, Atreides’ assets under management stood at approximately $4 billion, up from $3 billion just a few years prior, according to reports. Notably, the fund has maintained a significant stake in Tesla since 2019. Baker is an outspoken advocate for Elon Musk’s initiatives and publicly endorses his innovative ventures. This month, Elon Musk’s proposal to relocate Tesla’s headquarters from California to Texas has garnered significant attention and support.
was allocated more than 357,000 shares at a cost of approximately $25 million. Founded by Myspace founder Josh Berman, this fund has a specific focus on Los Angeles-based projects. Despite this, Troy’s managing partner, Anthony Tucker, is actually responsible for securing SpaceX funding on Troy’s behalf. Troy has backed SpaceX since its Collection J round in 2019, valuing the company at approximately $28 billion post-money, according to PitchBook data. Troy, a venture that focused on Los Angeles-based companies while not exclusively limiting its scope, also invested in Hyperloop One, a now-defunct startup that sought to develop high-speed underground transportation linking San Francisco and Los Angeles, inspired by Elon Musk’s original concept.
Additionally, the sale licensed two more investors to purchase approximately another $50 million in shares combined, with documentation too thin to reveal their connections to Elon Musk.
Despite repeated outreach efforts, SpaceX failed to respond, except for Atreides, which declined to comment.
