SpaceX employees, ahead of the company's listing on the 12th, are grappling with how to manage the large assets they have suddenly acquired. As they face decisions on when and how much of their allocated shares to sell, a growing number are turning to wealth management experts.
According to The Wall Street Journal on Monday, interest in managing stock compensation is rising not only among SpaceX employees but also among executives and staff at major technology companies expected to list on U.S. markets in the future, such as Anthropic and OpenAI.
As initial public offerings (IPOs) bring them life-changing assets, more people are seeking advice on timing of sales, tax burdens, and asset diversification strategies, according to the report.
A former employee identified as A, who holds about $21.4 million (approximately 32.6 billion won) worth of SpaceX shares based on the offering price, recently consulted with Eric Franklin, a wealth manager specializing in IT industry workers.
Franklin recommended selling some of the stake, but A reportedly took a cautious stance toward early selling, highly valuing the company's growth potential. "The client still seems to think SpaceX is a special company," Franklin said.
"Don't Try to Time the Peak"... Experts Advise Diversification
The wealth management industry advises caution against the risk of assets being excessively concentrated in a single company's stock. Tara Schulman, a wealth manager at Compound Planning, encourages clients to establish a diversification plan in advance and execute it consistently.
"Employees who received stock should avoid getting swept up in the emotional turmoil that follows the company's IPO," she said. "Rather than fixating on the idea of selling stock at the best possible time, it is important to set your own criteria and stick to them."
Diogo Monica, a venture capital investor and co-founder of the cryptocurrency bank Anchorage Digital, also disclosed his own selling principles. He sells 20% of his holdings immediately after listing, then disposes of an additional 60%, and holds the remaining 20% for the long term as a sign of trust in the company.
Taxes Scarier Than Stocks... "Selling Wrong Raises the Burden"
Experts stress that taxes are also a factor that must be considered after an IPO. SpaceX, Anthropic, and OpenAI employees receive various forms of stock compensation, including non-qualified stock options (NSO), incentive stock options (ISO), restricted stock units (RSU), and employee stock purchase programs (ESPP), and the tax basis can vary depending on the form of compensation.
Selling too much stock in a single year or exercising a large amount of non-qualified stock options can raise the tax rate. Incentive stock options can also vary greatly in tax burden depending on the timing of exercise, so experts recommend a strategy of spreading out exercises over several years.
Giovanni Tiso, a certified financial planner at Titan, warned, "Some people take out loans to pay their taxes. Even if the stock price falls after the IPO, you still have to pay the taxes."
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