Unlock cash out tools early! Rumor has it that Xiaomo gave the green light to SpaceX (SPCX.US) equity pledge. Was it a bottom-building buffer or a downside time bomb?

The Zhitong Finance App notes that, according to people familiar with the matter, J.P. Morgan Chase is taking action to win over the wealth created by SpaceX (SPCX.US)'s June IPO.

People familiar with the matter revealed that prior to SpaceX's June IPO, J.P. Morgan told its investment bankers that it could accept newly listed shares from some insiders as collateral for loans earlier than the usual 135-day waiting period. This allows eligible employees and early investors to get cash without selling shares and possibly without triggering taxes. Komo earned $75 million in this underwriting.

The bank said its official policy remains the same, and specific decisions vary from person to person. J.P. Morgan said, “We always evaluate transactions based on specific circumstances and specific customers, and take into account factors such as market liquidity.”

Newly listed stocks can be volatile and subject to a ban period, making them riskier collateral. J.P. Morgan's typical 135-day waiting period is also longer than the 30-day period that broker-dealers usually adhere to after participating in an IPO business. J.P. Morgan bankers anticipate that its employees may also receive similar special treatment after Claude's developer Anthropic goes public.

Stock mortgages are a double-edged sword

According to conventional logic, when insiders obtain liquidity requirements (such as tax payments, personal asset allocation) through an IPO, they can only cash out by directly selling stocks on the market. After J.P. Morgan provided stock mortgages, insiders were able to get cash without selling stocks. This directly reduced potential concentrated sell-offs in the market and supported stock prices.

Lock in chips and maintain a stable circulation market: Since SpaceX's public circulation market is relatively small (the IPO only releases about 4% of shares), if early employees and investors sell off in large numbers, it will have a severe impact on the stock price. Mortgage loans locked this part of the chips into the hands of banks, preventing the market from flooding with liquidity in a short period of time.

If SpaceX's stock price corrects sharply in the future, hitting the mortgage liquidation line, J.P. Morgan will have to forcibly sell the collateralized shares on the secondary market. This forced liquidation may trigger a “downward spiral” when stock prices fall, exacerbating sharp fluctuations in stock prices.

Although the operation avoided direct sell-off through borrowing, it also shows that insiders are in strong demand for cash out. The market may interpret this as “insiders believe that the current valuation is already high,” thereby curbing the enthusiasm of external investors to a certain extent.