<\/p>\n
Juan Hernandez, who now works as a welder at Jeff Bezos-owned rival Blue Origin, is one of more than 4,400 current and former SpaceX employees who became millionaires on paper when the company went public. <\/p>\n
When SpaceX hired Juan Hernandez as a welder in 2015, the company offered him $10,000 in stock alongside his $28-an-hour wage.\u00a0<\/p>\n
He accepted the equity without giving it much thought, since none of his previous hourly positions had included company shares, Hernandez told CBS News.<\/p>\n
SpaceX priced its initial public offering at $135 per share ahead of the Nasdaq debut, valuing Hernandez’s 6,500 shares at roughly $880,000 at the offer price, Fortune reported.\u00a0<\/p>\n
The offering raised $75 billion at an implied valuation of approximately $1.77 trillion, according to Nasdaq, and became the largest initial public offering in history, nearly tripling the previous global record set by Saudi Aramco’s $25.6 billion listing in 2019.<\/p>\n
However, the celebration has come with details that most headlines overlooked, and the reality of the windfall is more complex. <\/p>\n
Shares have dropped roughly 35% from their post-debut peak, and lockup agreements prevent most employees from selling their stock for months.\u00a0<\/p>\n
SpaceX created thousands of employee millionaires from the factory floor to the C-suite<\/p>\n
The scale of wealth creation across SpaceX\u2019s workforce makes this listing unusual among technology IPOs, which typically reward only executives and software engineers, Fortune reported.\u00a0<\/p>\n
An analysis by Hill.com, a San Francisco-based investment platform, found that about 400 employees are expected to hold stakes exceeding $100 million, the New York Times reported.<\/p>\n
Ruchir Shah, CEO of SkillCat, an online skilled trades training startup, told Fortune that SpaceX is exposing a broader truth about the future economy, where some of the hardest-to-automate and hardest-to-fill roles sit in the physical world.<\/p>\n
If you think about it, these are some of the most critical people for SpaceX to grow. It’s just as hard to find good welders and good machinists as it is a software developer, if not harder because if there’s a massive shortage, so it makes sense that they were given equity<\/p>\n
The new millionaires include welders, machinists, technicians, and manufacturing workers who built rockets and launchpad structures for years before the listing, Fortune reported.\u00a0<\/p>\n
According to the SpaceX prospectus, the company distributed equity through stock option grants at hiring and promotion milestones, annual performance awards, and an employee stock purchase plan.<\/p>\n
Twice-yearly liquidity events also let employees sell portions of their holdings even while the company remained private, a former employee told the Next Web.\u00a0<\/p>\n
Those periodic selling windows gave long-tenured staff an early signal of the wealth their accumulated equity could generate on open markets.<\/p>\n
SpaceX shares have dropped roughly 35% from their post-listing peak<\/p>\n
The stock\u2019s price trajectory since the first trading day illustrates why a brokerage account balance and a bank account balance are very different things.\u00a0<\/p>\n
SpaceX shares opened at $150 on June 12, surged to an intraday high of $225.64 on June 16, and then trended lower through late June and early July, hitting an all-time low of $145.07 on July 10, according to TradingView data.<\/p>\n
More SpaceX:<\/p>\n
Elon Musk sets SpaceX IPO price in blunt message to Wall StreetVeteran hedge fund manager makes a brazen SpaceX betFranklin Templeton CEO sends strong message on SpaceX<\/p>\n
For Hernandez, whose 6,500 shares were worth about $1.05 million at the $160.95 first-day close according to CBS News, that decline would cut his holdings to roughly $942,500 at the $145.07 low.<\/p>\n
Lockup restrictions add another layer of friction for employees hoping to convert paper gains into spendable cash.\u00a0<\/p>\n
SpaceX’s prospectus allows most insiders to sell up to 20% of their holdings after the first quarterly earnings report, expected August 6, Fortune reported.\u00a0<\/p>\n
An additional 7% unlocks at each of the 70-, 90-, 105-, 120-, and 135-day marks, with a further 28% released after the third-quarter earnings report and the remaining restrictions lifting at day 180, the SpaceX prospectus showed.\u00a0<\/p>\n
SpaceX shares have plunged 35% since their post-debut peak, shrinking employee paper wealth while lockup rules delay access to cash gains.<\/p>\n
Spencer Platt/Getty Images<\/p>\n
Why SpaceX millionaires may not stay that way<\/p>\n
On Hernandez’s 6,500 shares alone, the drop from $225.64 to $145.07 wiped out roughly $524,000 in paper wealth in under a month. <\/p>\n
Jason Schloetzer, an associate professor of accounting at Georgetown University\u2019s McDonough School of Business, cautioned against reading SpaceX as a blueprint for blue-collar wealth creation.<\/p>\n
\u201cThis is largely venture-backed compensation attached to a company that happens to build rockets,\u201d Schloetzer told Fortune.<\/p>\n
He noted that many employees accumulated shares through the company\u2019s stock purchase plan, buying discounted equity with their paycheck deductions rather than receiving free grants.\u00a0<\/p>\n
That structure shifts financial risk from the employer to the employee, replacing the guaranteed pensions and profit-sharing arrangements that once protected industrial workers, Schloetzer explained in the Fortune interview.<\/p>\n
SpaceX stock represents up to 90% of many employees’ total net worth, Jamie Battmer, chief investment officer at Creative Planning, told CNBC, creating substantial downside exposure in a single volatile holding.<\/p>\n
Morningstar equity analyst Nicolas Owens added a further layer of concern, placing SpaceX\u2019s fair value at $63 per share, roughly 53% below the offering price.<\/p>\n
\u201cOur valuation is the result of mathematics more than skepticism,\u201d Owens wrote in the firm\u2019s analysis of SpaceX\u2019s financial outlook and IPO pricing.<\/p>\n
Newly wealthy SpaceX employees are reshaping the wealth management industry<\/p>\n
The sudden flood of liquid wealth has pushed more than 100 SpaceX employees to band together and negotiate discounted advisory services as a group.\u00a0<\/p>\n
That collective, representing between $1 billion and $5 billion in combined assets, signed with registered investment advisor Choreo at fees starting at 0.5%, CNBC reported.\u00a0<\/p>\n
The fee falls below the industry standard range, giving the group a meaningful cost advantage over individual advisory relationships.<\/p>\n
Jason Van de Loo, Choreo\u2019s chief executive officer, told CNBC that most investors spend decades building wealth, but SpaceX employees received theirs virtually overnight.\u00a0<\/p>\n
He compared the windfall\u2019s speed to receiving a large inheritance, noting the difficulty of processing so many financial decisions at once.<\/p>\n
Private banks, trust companies, and independent advisors have dispatched teams to California, Texas, and Florida to court the newly wealthy employees, CNBC noted.<\/p>\n
Related: SpaceX investors may be ignoring troubling trend<\/p>\n
#rich #SpaceX #workers #IPO<\/p>\n","protected":false},"excerpt":{"rendered":"
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