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When SpaceX went public on June 12, 2026, it became the largest IPO in U.S. history, pricing at $135 per share and valuing the company at nearly $1.8 trillion. For employees who had spent years accumulating equity—many of them through stock options and RSUs granted when the company was worth a fraction of that amount—the IPO represented a once-in-a-lifetime wealth event.
It also forced a difficult decision. Should you hold everything and let your conviction in the company ride? Sell a portion and lock in gains? Diversify into a broader portfolio? Or hedge your exposure in a way that reduces risk without abandoning the position entirely?
At Axon Capital Management, we work with SpaceX employees navigating exactly these decisions. In the months leading up to the IPO, some employees chose to hedge or systematically reduce their exposure. Others held everything.
Here's the core point we want to make in this article: hedging isn't necessarily a bet against SpaceX. It's a way to manage the risk of having too much of your wealth—and your future—tied to a single company. And the volatility SpaceX stock has experienced since the IPO illustrates why managing concentration risk can be so valuable, regardless of what the stock does next.
It's worth being precise about why concentration risk for an employee is fundamentally different from an outside investor simply owning a large SpaceX position.
An outside investor who owns SpaceX stock has one form of exposure: the share price. An employee has several layers of exposure stacked on top of each other. Your salary comes from SpaceX. Your future equity grants depend on SpaceX. Your vested shares rise and fall with SpaceX. Your unvested shares—which may represent years of future compensation—are tied to SpaceX. And your career itself, including the skills, relationships, and professional reputation you've built, is intertwined with the company's trajectory.
If the company stumbles, an outside investor loses some portfolio value. An employee can lose portfolio value, future compensation, and job security all at once. That correlation is the essence of concentration risk.
Consider a hypothetical employee with $10 million in SpaceX stock and $2 million in diversified investments. On paper, they're wealthy. But roughly 83% of their investable net worth is in one stock—and that's before accounting for the fact that their paycheck, their unvested grants, and their career prospects are tied to the same company. This person isn't simply an investor with a large SpaceX position. Nearly everything in their financial life depends on a single enterprise.
For years, SpaceX employees had limited options. Private-company shares are hard to sell, hard to value, and hard to hedge. The IPO changed that. Public listing brought liquidity, transparent price discovery, the ability to monetize shares in an orderly way, and—importantly—access to hedging tools like exchange-traded options that simply weren't practical before. The IPO wasn't just a wealth event. It was a risk-management opportunity.
This is the most common misconception we encounter. Employees often feel that hedging or selling is an act of disloyalty, or an admission that they don't believe in the mission. It isn't. You can be extremely bullish on SpaceX's long-term potential and still hedge, because the goal of hedging isn't to profit from a decline—it's to reduce the risk of a catastrophic one. Company conviction and personal financial risk tolerance are two different things, and a sound financial plan treats them separately.
Many SpaceX employees had accumulated equity over five, ten, or more years, watching private-market valuations climb tender offer after tender offer. By the time the IPO priced the company near $1.8 trillion, many employees were sitting on genuinely life-changing wealth—enough to fund retirement, children's education, a home, and long-term financial independence.
The question at that point wasn't only "How much more could this be worth?" It was also "What would it mean for my family if this position lost half its value?" Remaining fully concentrated has an opportunity cost that's easy to overlook when a stock has only ever gone up: the opportunity to convert paper wealth into durable financial security.
Hedging occupies the middle ground between holding everything and selling everything. The idea is simple: stay invested without staying fully exposed. An employee who hedges half their position still benefits meaningfully if SpaceX soars—but is far less vulnerable if it falls.
There are several ways employees can reduce concentration risk, ranging from simple to sophisticated. The right approach depends on your circumstances, the restrictions on your shares, and your tax situation.
The simplest approach is also often the most effective: sell a portion of the position and reinvest the proceeds in a diversified portfolio. This directly reduces concentration, converts single-stock risk into market risk, and requires no complex instruments. For many employees, systematic partial selling over time—rather than an all-or-nothing decision—is the foundation of the strategy.
Now that SpaceX trades publicly, options strategies are available that weren't practical when the company was private. A protective put gives you the right to sell shares at a predetermined price, effectively setting a floor under a portion of your position. A collar combines a protective put with a sold call, which reduces or eliminates the upfront cost of the hedge in exchange for capping some upside.
Whether these strategies are feasible for you depends on several factors: whether your shares have been delivered and are freely tradable, any lockup or blackout restrictions that apply to you as an employee, company trading policies, and your individual financial circumstances.
For very large positions, more sophisticated structures exist. A prepaid variable forward, for example, allows a shareholder to receive cash upfront—typically 75–90% of the position's value—while deferring the actual sale and retaining some exposure to the stock within a defined range.
These strategies can be powerful, but they come with significant tax, legal, liquidity, and counterparty considerations, and they are not appropriate for everyone. Anyone considering a structured strategy should work with experienced financial, tax, and legal advisors before proceeding.
A 10b5-1 plan is a written, predetermined trading plan that allows employees—including those who may periodically possess material nonpublic information—to sell shares on a fixed schedule. For SpaceX employees, these plans offer several advantages: they enable systematic selling regardless of headlines or share-price swings, they remove emotional decision-making from the process, and they can serve as the engine of a long-term diversification program. Because the trading instructions are set in advance, a 10b5-1 plan also provides an affirmative defense against insider-trading concerns when properly established.
The IPO priced at $135 per share on June 11, 2026, and shares began trading the next day, closing their first session around $161. Within days, the stock ran to an intraday peak of roughly $225 on June 16, briefly pushing the company's valuation past $2 trillion. The enthusiasm didn't last. Over the following weeks the stock slid steadily, falling below its IPO price in mid-July after a delayed Starship launch, and at recent lows trading in the range of roughly $113–$129—down approximately 50% from its post-IPO peak at the low end, with more than $1 trillion in market value erased from the June high.
(Note: update these figures immediately before publication—this stock has been moving quickly.)
The employees who hedged before the IPO didn't need to know the stock would fall—and that's precisely the point. Hedging is risk management, not market timing. The decision is justified by the risk it removes, not by a forecast. If the stock had doubled instead, a hedged employee would still have participated in much of that gain while sleeping better along the way.
Here's a question worth sitting with: if you've already accumulated enough wealth to meet your financial goals, why risk losing a significant portion of it in pursuit of additional upside you don't need? Once a position is large enough to secure your family's financial independence, the marginal benefit of further gains is often far smaller than the potential cost of a major decline. The math of "winning more" and the math of "not losing what you've won" are not symmetrical.
A $1 million equity position that could become $10 million is a growth opportunity worth taking risk for. But once it is $10 million, the decision framework changes. The same position that once represented potential now represents something to protect. Many employees never update their thinking as their wealth grows—they keep making the decision that was right at $1 million long after they've reached $10 million.
There's no universal answer to how much SpaceX stock an employee should keep. The right number depends on your age, your spending needs, your other assets, your real estate holdings, your tax situation, your expected future equity compensation, your risk tolerance, and your financial independence goals. Two colleagues with identical share counts can reasonably arrive at very different answers—because the shares are only one input into two very different financial lives.
Any honest discussion of this topic has to acknowledge the limits of hindsight.
SpaceX stock could rebound sharply from here—and a fully invested employee could ultimately earn far higher returns than one who hedged. Hedging has real costs: option premiums, capped upside in collar structures, and complexity. Selling or hedging can also trigger meaningful tax consequences that reduce the net benefit. The recent decline makes hedgers look prescient today, but the same article written after a 50% rally would tempt readers toward the opposite conclusion. Neither reaction is quite right.
This is the philosophical heart of the matter: a good financial decision isn't necessarily the one that produces the highest return. It's the one that appropriately balances risk and reward given your goals, at the time it was made, with the information available. An employee who hedged and watched the stock double didn't make a mistake—they bought insurance they turned out not to need. An employee who stayed fully concentrated and watched the stock fall didn't merely get unlucky—they took a risk they may not have needed to take.
The first two months of SpaceX's life as a public company offer several durable lessons. Concentration risk is real, even for extraordinary companies. Your employer's stock is uniquely risky for you because your career is tied to the same enterprise. IPO liquidity creates a natural moment to reassess how much risk you're carrying. You don't have to sell everything to reduce risk meaningfully—partial diversification and hedging exist precisely so this isn't an all-or-nothing choice. Taxes should be built into the decision from the start, not considered afterward. And ultimately, a financial plan—not a stock forecast—should determine how much risk you actually need to take.
At Axon Capital Management, we work with SpaceX employees and other technology professionals who have accumulated significant equity compensation and need to make decisions around concentrated stock positions. Our process is built around your full financial picture, not just the stock.
We start by mapping everything: your SpaceX shares (vested and unvested), your other investments, real estate, cash reserves, income, and expected future equity compensation. Concentration can only be assessed in context.
We then stress-test your plan against multiple futures: a significant decline in the stock, flat performance over an extended period, and continued appreciation. The goal is to understand what each scenario would mean for your goals—and identify which risks you can afford to take and which you can't.
From there, we build a strategy that may combine outright selling, systematic diversification over time, hedging where appropriate, and 10b5-1 plans that put the strategy on autopilot and keep emotion out of execution.
Every element is coordinated with tax planning: capital gains management, cost basis analysis across grant lots, estimated tax payments, alternative minimum tax where applicable, and tax-loss harvesting opportunities that volatility can create. A diversification strategy that ignores taxes can give back a substantial share of its benefit.
Generally yes, though it depends on the shares and the timing. Now that SpaceX is publicly traded, employees with freely tradable shares can typically use tools like protective puts or collars, subject to company trading policies, blackout windows, and any remaining lockup restrictions. Unvested shares generally cannot be hedged directly.
The main approaches are selling a portion of the position and reinvesting in diversified assets, hedging with options or structured strategies, and establishing a 10b5-1 plan for systematic selling over time. Most employees use a combination rather than a single tactic.
There's no one-size-fits-all answer. The decision depends on how large the position is relative to your total wealth, your financial goals, your taxes, and your risk tolerance—not on a prediction about the stock. For many employees, selling some portion on a systematic schedule is a reasonable middle path.
No. Selling permanently converts shares into cash and typically triggers capital gains taxes immediately. Hedging keeps you invested while limiting downside—often deferring the sale (and the tax) while reducing risk. Each has different costs, tax consequences, and trade-offs.
A 10b5-1 plan is a written trading plan, established in advance, that specifies when and how shares will be sold. It allows employees to sell on a predetermined schedule even during periods when they might otherwise be restricted, removes emotion from the process, and provides an affirmative defense against insider-trading claims when properly structured.
In many cases, yes. With SPCX trading publicly, listed options are available. A protective put sets a floor under a portion of your position for a premium; a collar can reduce that cost by selling a call against the position. Employees must comply with company trading policies and applicable securities rules, so review your specific situation before implementing any options strategy.
For most employees whose SpaceX position represents a large share of their net worth, some degree of diversification is worth serious consideration. The question is usually not whether to diversify but how much and how fast—which is a function of your financial plan, taxes, and conviction in the company.
It depends on your age, spending needs, other assets, future equity grants, taxes, and financial independence goals. A common framework is to first determine how much diversified wealth you need to secure your core goals, then treat concentrated stock above that threshold as risk capital you can afford to hold—or reduce—based on conviction.
Key considerations include short-term versus long-term capital gains rates, cost basis differences across grant lots (options, RSUs, and tender-offer purchases may have very different bases), estimated tax payments on large gains, potential alternative minimum tax exposure for those who exercised ISOs, and opportunities for tax-loss harvesting. Selling decisions and tax planning should be made together, not sequentially.
The employees who hedged before the IPO may ultimately look smart—not because they predicted the decline, but because they recognized the risk of having too much of their financial future tied to a single company. That distinction matters. Good risk management doesn't require a crystal ball.
You can believe strongly in SpaceX's long-term potential while also recognizing that your family's financial security shouldn't depend entirely on the stock's performance. Those two ideas are not in conflict; holding both at once is the mark of a thoughtful plan.
At Axon Capital Management, we help SpaceX employees navigate these decisions by looking at concentrated equity as part of a broader financial plan. If you're interested in building a strategy that allows you to participate in SpaceX's potential upside without putting your financial independence at unnecessary risk, fill out the form below or schedule a wealth consultation.
Article written by Brady Lochte, founder of Axon Capital Management and a fee-only fiduciary financial advisor. Brady is committed to providing clear, transparent financial guidance that helps people navigate retirement, investing, and long-term planning with confidence.
This article is for informational purposes only and does not constitute investment, tax, or legal advice. Hypothetical examples are for illustration only and do not represent actual client results or predictions of future performance. Consult a qualified advisor regarding your individual circumstances.
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