FathomTech
Search
Funding radar All Funding
Company

IPO terms explained: confidential S-1, roadshow, lock-up, direct listing

A confidential S-1 is a draft registration statement a company submits to the SEC for private review before it reveals its IPO paperwork to the public. A lock-up is a contract, usually lasting about 180 days, that stops insiders from selling shares right after the listing. The terms below follow the order in which they show up in a US IPO, with SpaceX's 2026 Nasdaq offering used as a filed, checkable example.

Rules and figures are stated as of October 2026. Everything here explains process; none of it is investment advice.

The IPO timeline at a glance

  1. Confidential draft registration statement (DRS) and SEC staff comments
  2. Public S-1 filing and amendments
  3. Price range in the preliminary prospectus
  4. Roadshow
  5. Effectiveness, pricing and the final prospectus
  6. Over-allotment option (greenshoe) and first trades
  7. Research quiet period
  8. Lock-up expiry

SpaceX's EDGAR filing history shows almost every step: a DRS on March 30, 2026, an amended draft on May 7, the public S-1 on May 20, amendments on June 1 and June 3, the SEC's notice of effectiveness on June 11 and the final prospectus on June 12.

Confidential S-1 (draft registration statement)

A draft registration statement lets a company and its lawyers work through SEC staff comments without competitors or the press reading every revision. The JOBS Act of 2012 gave this option to emerging growth companies, and since 2017 the SEC has accepted nonpublic drafts from all issuers. In March 2025 the SEC broadened the accommodation further, for example for follow-on offerings by companies that are already public.

The key condition: a company doing an IPO must publicly file its registration statement, together with the earlier drafts, at least 15 days before it starts the roadshow. If there is no roadshow, the deadline is 15 days before the date it asks the SEC to declare the filing effective. Draft submissions appear on EDGAR as "DRS" and "DRS/A" once they are made public, which is why SpaceX's March 30 draft is now visible.

SEC comments

SEC staff review the draft and send comment letters asking for clearer disclosure or more support for numbers. The company answers and resubmits. The SEC says it publishes staff comment letters and company responses on EDGAR no earlier than 20 business days after the registration statement becomes effective. Staff letters appear as "UPLOAD" and company replies as "DRSLTR" or "CORRESP"; in SpaceX's case all three types are listed between April and June 2026.

S-1 filing: what the public document contains

Form S-1 is the standard registration statement for US companies. According to the SEC's explainer, it has two parts. Part I is the prospectus, the selling document that describes the business, financial condition, results, risk factors and management, with audited financial statements. Part II holds additional information and exhibits that are filed with the SEC but not delivered to investors.

Once the S-1 is public, anyone can read it. Amendments are filed as S-1/A. A company cannot sell the registered shares until the SEC declares the registration statement effective.

Price range and the preliminary prospectus

A preliminary prospectus, often called a red herring, usually leaves the share count and price blank at first, then adds an expected price range in a later amendment. That range is what investors are asked to consider during the roadshow.

SpaceX took a less common route. Its June 1 amendment still had blanks, but the June 3 S-1/A stated an expected price of $135.00 per share for 555,555,555 Class A shares, a single figure rather than a range.

IPO roadshow

The roadshow is the marketing period in which management and the underwriters present the company to institutional investors and gather orders. Written marketing materials used during this period are often filed as free writing prospectuses (FWP). SpaceX filed several FWPs between June 4 and June 11, 2026.

The 15-day rule ties the roadshow back to the confidential process: the public S-1 has to be out for at least that long before marketing begins.

Pricing, effectiveness and the final prospectus

When the order book is complete, the company asks the SEC to declare the registration statement effective, and the company and underwriters set the final price. The final prospectus is filed under Rule 424(b), which is why it appears on EDGAR as a "424B4".

In SpaceX's case the SEC notice of effectiveness is dated June 11, 2026, and the final prospectus, dated the same day, priced the IPO at $135.00 per share. Gross proceeds were just under $75 billion. Underwriting discounts were $0.90 per share, or $500 million in total, and shares were due for delivery on or about June 15. The stock is listed on Nasdaq and Nasdaq Texas under the ticker SPCX.

Greenshoe (over-allotment option)

A greenshoe gives underwriters the right to buy extra shares from the company at the IPO price, usually within 30 days. It lets them sell more shares than the base deal and then cover that position, which helps support trading in the first weeks.

SpaceX granted underwriters a 30-day option to buy up to 83,333,333 additional Class A shares, which equals 15% of the base offering. The prospectus says no underwriting discount applies to shares sold under that option.

First trade and early trading supply

After pricing, the exchange opens the stock and the first trade sets the market price, which can differ sharply from the IPO price. The SEC's investor bulletin on IPOs notes that lock-ups and underwriter policies against "flipping" (selling IPO shares immediately) limit how many shares trade in the first days, which can push prices up when demand is high.

Quiet period

"Quiet period" is used for two different things. Before and during registration, federal securities law limits how a company can promote its offering, which is why companies tend to avoid publicity once they have filed.

After the IPO, FINRA Rule 2241 sets a research quiet period: a firm that acted as an underwriter or dealer may not publish research reports on the issuer for at least 10 days after the IPO. The rule does not apply to IPOs of emerging growth companies.

Lock-up period after an IPO

A lock-up is a contract between the company, its insiders and the underwriters, not a rule imposed by the SEC. The SEC explains that most lock-ups keep insiders from selling for 180 days, and that a company must disclose the terms in its registration documents. When a lock-up ends, a large block of shares can become sellable at once, and the SEC bulletin warns the share price may fall as a result.

Lock-ups can also be staged rather than ending on a single date. The SpaceX prospectus shows how detailed they can be:

The lead underwriter, Goldman Sachs, may waive the restrictions at any time. To find the lock-up terms for any listed company, read the "Shares Eligible for Future Sale" and "Underwriting" sections of its prospectus on EDGAR.

Dual-class shares

Some companies list with two share classes so founders keep control after selling stock. SpaceX's Class A shares carry one vote each and its Class B shares carry 10 votes. The prospectus says Musk would hold about 82.4% of the voting power after the offering, making SpaceX a "controlled company" under Nasdaq rules, which allows it to use exemptions from some governance requirements.

Direct listing vs IPO

In a direct listing, a company's shares start trading on an exchange without a traditional underwritten offering. According to the NYSE, there are two types:

The main differences from an IPO: there is no underwriter setting the price in advance, the opening auction sets the first price, there is no greenshoe, and no lock-up is required.

For more on how private companies raise money before they list, see our Funding coverage, the OpenAI valuation history and the AI Business section.

Frequently asked questions

What is a confidential S-1 filing?

It is a draft registration statement submitted to the SEC for nonpublic review before an IPO. The company must make it public at least 15 days before its roadshow, or 15 days before requested effectiveness if there is no roadshow.

How long is the lock-up period after an IPO?

The SEC says most lock-ups last 180 days, but the length is set by contract and can be shorter, longer or released in stages. The exact terms are disclosed in the company's prospectus.

What happens when an IPO lock-up expires?

Insiders such as employees and early investors become free to sell their shares. The SEC warns that if many shares become sellable at once, the share price may decline.

Is a direct listing cheaper than an IPO?

Usually, yes, on underwriting costs: no underwriter buys the shares and resells them, so there is no IPO-style underwriting discount, although companies still pay financial advisers and legal fees. The trade-off is that there is no price set in advance and no greenshoe to support early trading.

How long does the SEC take to review an S-1?

There is no fixed timeline; it depends on how many rounds of comments are needed. SpaceX's first draft was submitted on March 30, 2026, and its registration statement was declared effective on June 11, 2026.