SpaceX float is only about 4%
New rules from Nasdaq remove the 10% minimum requirement.
Under the old rules, a new stock had to season for at least 3 months before it could join the index, and it had to have at least 10% of its shares traded publicly. Both of those requirements are now gone. Now, a stock is eligible for fast-track inclusion after just 15 trading days, with almost no float if its market capitalization places it among the top 40 holdings of the Nasdaq-100.
There are reports that Musk is asking underwriters to waive the typical 180-day lock-up period that prevents company insiders and some other shareholders from selling their shares after an IPO.
According to Semafor, Musk is pushing for a much shorter lock-up, or even none at all, with insiders able to sell in gradual tranches tied to price and trading-volume thresholds.
That would do away with rules designed to prevent insiders from cashing out at peak hype, which are standard protections for new public shareholders.
In practice, this means insiders get to cash out at what will probably be a record valuation for the company right when retail investors get their first opportunity to buy in.
Musk is also apparently negotiating an above-average level of retail participation in the offering, directing 20% to 30% of the IPO to individual investors, compared to the more typical 5% to 10%. Allowing insiders to exit quickly to retail buyers raises eyebrows about who benefits from these underwriting changes.