SpaceX insiders will get to sell shares earlier than usual after the IPO

When most companies go public, they follow a simple rule: insiders can't sell their shares for 180 days after the IPO. SpaceX is taking an unusual approach that could allow pre-IPO investors to sell sooner.

The company built in a series of release valves that allow insiders to sell portions of their stock in the weeks and months after the IPO. This phased approach to insider selling accomplishes a few things. It prevents potential pressure on the stock when a lock-up is lifted and everyone can sell at once. And perhaps, even more noteworthy: It also could increase the float - or shares available to trade - sooner, which has implications for faster inclusion in the Nasdaq 100.

Here's how SpaceX structured its lock-ups, according to the S-1 filling. After reporting earnings for the three months through June - the company's first results as a public company - insiders can sell up to 20% of their eligible locked-up shares. If this stock is also trading at least 30% above the IPO price at that point, they can sell an additional 10%.

Then there's a rolling schedule, comprising 70, 90, 105, 120 and 135 days post-IPO, where another 7% unlocks at each of those interviews. Additionally, when SpaceX reports its second earnings as a public company - for the three months through September - an additional 28% can be sold. At the 180-day mark, whatever remains would be fully released.