The Journal. - He Thought He Invested in SpaceX. Then His Shares Vanished.

Episode Date: August 13, 2026

After the massive initial public offering earlier this year, some investors who thought they had gotten early exposure to shares of SpaceX discovered things may not have been quite what they seemed. WSJ's Corrie Driebusch chronicles the rise of special-purpose vehicle funds and the issues some investors are facing as they navigate private markets. Jessica Mendoza hosts. Further Listening: - 'Eject! Eject! Eject!' Inside the Private Credit Panic - Is SpaceX Worth the Hype? Sign up for WSJ’s free What’s News newsletter. Learn more about your ad choices. Visit megaphone.fm/adchoices

Back in 2020, a data engineer named Ram Rupertrii was feeling lucky. He had gotten a chance to buy into one of the hottest tech companies in the world. He was speaking to friends, and one of them mentioned to him, hey, I have some opportunities to buy into companies before they go public. And top on his list was the opportunity maybe to buy shares of SpaceX. Elon Musk's rocket company. Our colleague Corey Dreebush spoke with Rupireti about it. My friends knew that, you know, I invested in SpaceX for a long time, right?

Wherever I go, they used to tease me. Now you're a millionaire. You have this many stocks and all of stuff. So, you know. Because Rupertti got in as a pre-IPO investor, it meant that whenever SpaceX went public, he was set to potentially make a lot of money. When he bought into the shares,

in late 2020 and early 2021, the valuation of SpaceX was around $58 billion. So as that valuation grew, his plans grew as well. One of his children is going to be a senior this fall in high school. So in his head, this will pay for that college education. But the way Rupertty was invested in SpaceX was pretty complicated. It was through something called a special purpose vehicle, or SPV.

He wasn't buying the actual shares of the company. He was buying a share or an interest in a fund, and the fund supposedly held shares of the company. So he was a little bit removed? He was a little bit removed, and as we continue, we'll understand how far removed he ended up being. SPVs can be a lucrative way to get access to private markets, but they can also be risky, and they're mostly unregulated.

When SpaceX went public earlier this year, lots of investors made bank. But Ruperetti found out that his shares were missing from his account. His dream of a windfall quickly turned into a bit of a logistical nightmare. Welcome to The Journal, our show about money, business, and power. I'm Jessica Mendoza. It's Thursday, August 13th. Coming up on the show, the SpaceX shares that vanished before investors could cash in.

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Learn more at Accenture.com slash Spotify. For about 25 years, SpaceX operated as a private company. So private companies, they need a lot of money, especially private companies with as great of ambitions as SpaceX has. They need money to fund that. So throughout their growth, as private companies, they sell shares to raise capital. SpaceX invited an elite group of people to invest in the company by buying those shares. So investors, venture capital funds, think family offices or other friends, as we've written

about friends of Musk himself, were early backers in SpaceX. So every time SpaceX was doing a share sale, they were offered oftentimes first the shares to purchase. Okay. But a rule that regulators have that the Securities and Exchange Commission has is that you can only have up to 2,000 investors who are listed on what is called like your capitalization table for a private company before you have to start putting out more financial disclosures. Otherwise, you essentially are almost forced to become a public company. So over time, SpaceX would go back to the same pool of investors, who then found themselves. with a lot of shares.

And many of those investors realized they wanted to do something with them. And maybe if think about a venture capital firm who has bought in for many, many years, they don't need to buy another $100 million worth

of shares. But they don't want to miss out on that opportunity either. So they started to turn around and say, you know what, we will buy, give us $50 million worth of shares, say. I'm just like, giving a hypothetical. We will create a fund. A fund or special purpose vehicle where investors can put

their private company shares, in this case SpaceX, and sell exposure, also called interest, to someone who isn't one of the company's millionaire investors. We will sell interest to other investors who otherwise have no way of accessing SpaceX aren't friends with Musk, don't have a connection. And they've figured, oh, we're doing a service. Also, we're going to attach a nice little fee on there. So we're going to make money in the process, too. And ultimately, what SPVs do is create an opportunity for more people to invest in buzzy companies before they go public. But SPVs aren't actually selling shares of a company. They're selling exposure to or interest in the company's shares. As a lawyer described to me, it's like a trust exercise.

You're being told, you know, when this company goes public, we promise we will deliver these shares. You have to trust that. You have to trust that they have the shares and that they will deliver them to you when they say they will. And people can make money from SPVs, even Rom Ruberetti. He'd invested in other companies through SPVs in the past. And in those cases, things went smoothly. Fees were taken out as to be expected. and he said he didn't actually make that much money,

but he didn't lose money, and he felt that it displayed some trust, that, okay, this works, this is what happens. And if it's a high-flying stock, they have the chance to have made a lot of money. But that's not what happened with Rupertti's investment in SpaceX. This was an example of how things can go wrong. To get exposure to SpaceX, Rupertrii invested over

$17,000 in an SPV run by a firm called Late Stage Management. Okay, so tell me about Late Stage Management, this investment firm that Rupertty put money in. What do we know about it? So Late Stage was based in New Jersey. It was founded in 2015, and it marketed itself to individual investors as a way to access the busiest hot tech companies. before they went public. It advertised that it only made money, once a company's shares went public,

and so investors like Rupertty believed that their shares wouldn't be sold until after their IPOs. And for the most part, everything seemed pretty legit to Rupertty. There was an online portal where he could look at his investments. Late stage also sent him tax forms every year.

But it turns out that late stage wasn't directly invested in SpaceX. It was actually invested in another SPV. So instead, there were multiple layers between it and the actual SpaceX shares. If you remember when I told you that early investors have access to this SpaceX stock, they buy them, they put them in the funds, and then they sell the interest. Well, sometimes somebody who buys that interest decides, We want to create our own fund and sell interest in that SPV.

So that's a second layer removed. Sometimes there can be third layers or fourth layers as well. So the farther you get away from the actual SpaceX stock, the more complicated things get. Right. So it was like SPVs all the way down. Yes. From what we can understand and from what our reporting shows, a private offshore investment firm based in the Bahamas called Capital Truth,

acquired a portion of an SPV that owned pre-IPO SpaceX shares. It then appears to have repackaged the interests, sold them to late stage. And that exposure was what Ruperetti had purchased. For years, he didn't realize how far removed he was. And did you know that these were SPEs? Like, did they talk about that? Yeah, I was not really sure about that it was SPV. You were not really sure?

I was not sure. The reality was that Rupertty was layers away from owning SpaceX stock. That became clear to him when SpaceX went public, and his shares were nowhere to be found. That's next. In June, SpaceX launched its IPO in one of the biggest public offerings in history. setting the stage for what could become the largest stock market listing on record. The company was valued at $1.77 trillion.

And lots of people were excited about the possibility of making big money, including Ram Ruperetti. I was thinking, this is going to be, you know, we was a kind of fortune, right? You know, basically. Did you celebrate if you have, like, a fancy dinner with your wife? Oh, yes.

You know, go out for dinner that day. Understandably, when he started hearing the potential valuations or how much SpaceX could be worth at its IPO, he got excited. Lots of zeros there. Lots of zeros. Trillion dollars. Who could imagine?

He said the day of the IPO, many of his friends knew he had purchased shares in this SPV and were texting him, congratulating him. His neighbors were joking. When are you going to throw a big party? to celebrate. So there was a lot of excitement. Ruperetti estimated that he had 2,500 shares in SpaceX and that after the IPO,

those shares would be worth more than $300,000. Shortly after SpaceX went public, Rupertty went online to look at his late stage account. But the portal was down. He couldn't access the portal, and he got nervous. When the portal came back online, his late stage account said for the first time that his SpaceX holdings were sold on December 31, 2024. That meant the shares of SpaceX he had exposure to had been sold a year and a half earlier, long before the IPO. This was news to Riparetti.

He says he tried to get a hold of Late Stage. He called Late Stage's mainline dozens of times, but he said no one answered. So on June 23rd, he wrote to Late Stage's operations email address asking for clarification, noting that this update raised a lot of questions. He also added an administrator at a New Jersey accounting firm that handled Late Stage's tax forms to the email chain. He just wanted another person to maybe be able to respond to him. The tax administrator responded, telling Ruperetti that they were conducting a comprehensive review. She said they would have information for him in a few months.

He also got a message from Late Stage's main email address that told him that the tax administrator couldn't tell him anything about the online portal, and that the portal was under maintenance. And then three days later, the operations email sent a note saying the portals, sent a note saying the portals. would be back up and working later that day. And when he logged on, his account showed he no longer held any SpaceX shares, but that his prior investment had resulted in $45,450 in his account, which he could claim. More than $45,000 isn't nothing. But remember, Ruperetti believed he was going to get $300,000. Because he thought his shares would be sold after SpaceX's IPO,

not a year and a half before. So they said he should have received an email at that time in September 2024. So Rupertty said he searched his spam, his junk email folders, trash. And he said he never received any communication from late stage about a sale in his stock. And he hadn't received any proceeds and his tax documents, which were reviewed by the journal from 2024 and 2025, said he still held the positions. So can an SBV do that? that sell a share before the company goes public? It all comes down to what they're offering documents

say. And most say provide a promise that it is, the plan is to hold on to the shares until a liquidity event the company is acquired or goes public. So it is rarely an expectation that it would be sold ahead of time. Late stage didn't respond to repeated requests for comment. The journal attempted to deliver questions to late stage's listed address, but a property manager at the building said the company moved out three years ago. So I guess, like, what ultimately happened to Rup Reddy? I think that really, and this was described to me by a lawyer that ultimately, if you are investing

in something, you need to make sure that you own what you think you own. And it's hard to do. But the closer one is to the actual shares, the better, it seems. That's what some legal experts have told me. It's hard to say what exactly happened with Rupertty. And that is now something that is being investigated. Rupertty says he hasn't cashed out what's in his late stage account because he believes he's owed more.

Some investors have hired lawyers to fight for what they say they're owed. I'm from India originally, but I did not expect these things can happen in the U.S. But I was amazed by the audacity of these people, you know, they could pull off something like this. The journal spoke to four other investors who shared similar complaints about late-stage SPVs. Some, including Rupertty, have raised the issue with the SEC. As to how all this could happen, well, SPVs aren't really regulated that much. SBBs are pretty lightly regulated. They're not subject to the same oversight as mutual funds, say.

They aren't required to publicly report who their investors are or what their holdings are. And they aren't required to file audited financials or detailed income statements, and they don't even need a SEC approval before they can raise money. So they sort of operate in a much more gray area, I would say. And so, like, what does their existence sort of tell us about the state of the IPO market or the ways that people want to or are able to invest their money? I think it speaks to this excitement about risk. It seems that traders and investors want ways to have the potential to earn a lot of money. faster. And also this recognition that pre-IPO investing has enriched so many people. Those lucky investors, they're millionaires, if not billionaires, from those investments. And there's sort of

become almost a two-stock market system. The stock market for the rich is the private markets. And And SPVs grew from that, this feeling that if you're not the super wealthy, maybe you can gain access to SpaceX or OpenAI or Anthropic through these SPV funds. And you were so desperate to be a part of that club of pre-IPO investors that many people started ignoring the risks or the red flags of maybe this is very far removed, maybe this won't be, this won't look like what I think it's going to look like. So in a season that is looking at a lot of big IPOs, I mean, could SPV spell trouble or greater risk for people? I think it remains to be seen.

Going off of reader feedback from my story that published, it seems there's a lot of concern. about SPVs that are currently out there. So I think we're going to be writing a lot more about SPVs in the coming months. That's all for today, Thursday, August 13th. The Journal is a co-production of Spotify and the Wall Street Journal. If you like our show, follow us on Spotify or wherever you get your podcasts. We're out every weekday afternoon. Thanks for listening. See you tomorrow.