SpaceX SPV investors' true holdings stay hidden until IPO lock-up ends

SpaceX goes public on Friday, yet some investors who backed the company through special purpose vehicles (SPVs) still don’t know how many shares they are entitled to—or whether they will receive any shares at all.

Investing through SPVs—where multiple parties pool money to invest in a single company—has existed for some time. However, SpaceX marks an unprecedented IPO with multiple layers of these vehicles. Because demand for SpaceX allocations has been so high in recent years, investors in one SPV have sometimes created a new SPV from their shares, leading to structures that are stacked four or five layers deep.

SpaceX will be the first major test of the legitimacy of multi-layer SPVs. In recent months, Anthropic and Anduril have announced they are disallowing such structures.

Nearly a dozen SPV managers and secondary market investors who spoke with TechCrunch said that backers in lower-tier vehicles may discover they own fewer shares than expected—or, in rare cases, may receive no shares at all.

In most cases, these investors won’t know how many SpaceX shares they actually own until the company’s rolling lock-ups—scheduled over roughly four months—begin to lift. That’s because SPV managers won’t start distributing shares to investors in these vehicles until they themselves gain access to the shares, sources told TechCrunch. Lock-up agreements prevent insiders—including employees, their friends and family, and venture investors—from selling shares for a set period after an IPO to avoid excessive selling pressure on the stock.

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. 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.

A secondary investor, who asked to remain anonymous, told TechCrunch that some investors in “messy” multi-layered SPVs will be surprised to learn that some of the shares they expect to receive will be “eroded by fees” pocketed by the SPV.

Ideally, the SPV manager would communicate with investors in their vehicle from the IPO date onward. “The problem is you have a communication chain where each person only knows what’s happening in the layer above them,” the secondary investor said.

In short, the structural ownership of these vehicles has become so convoluted that even the best-intentioned SPV sponsors may inadvertently mislead their investors.

The biggest concern for downstream SPV investors is that they may receive no shares in SpaceX at all.

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.

The fear, of course, is that Pennetta is not the only deceptive sponsor out there. Investors at the bottom of these structures essentially had to confirm that every single manager above them was legitimate. But given the messy structures of these deals, it’s likely some buyers didn’t vet the entire chain.

“A friend just shared in confidence – they bought SpaceX through a 2-layer SPV in 2021. The returns are supposed to be worth any fees, the only problem – the SPV manager stopped responding to emails or calls,” Nick Davidov, founder of venture firm Davidovs Venture Collective, posted on X last month. He wrote that the investor hasn’t heard from the SPV manager for a year.

Idan Miller, managing partner at the secondary market Unicorns Exchange, is convinced that a few other bad actors will be revealed once lock-ups expire.

“Once the lock-up of the shares is removed, and these SPVs start selling the shares, some vehicles will be revealed as scammers or fraud,” Miller told TechCrunch.