SpaceX Pre-IPO Investors Say Fund Manager Sold Their Shares Years Ago Without Telling Them

Investors who thought they'd scored one of the hottest private-market trades in years say the shares they were counting on simply vanished before they could cash in.

According to the Wall Street Journal, several investors who put money into special purpose vehicles, or SPVs, managed by a firm called Late Stage Management believed they still held pre-IPO SpaceX stock when the company went public in June. Instead, they say they later learned the underlying shares had been sold off years earlier, without their knowledge.

SPVs are pooled investment funds that let accredited investors buy indirect stakes in private companies like SpaceX before those companies list publicly. Investors don't own the shares directly. They own a piece of the fund, which owns the shares. That structure is legal and common in venture and pre-IPO investing. It also means investors are trusting the fund manager to actually hold what they say they're holding, and to tell investors if that changes.

Virginia data engineer Ram Rupireddy told the Journal he put $17,250 into a Late Stage fund back in 2020 specifically because it was pitched to him as SpaceX exposure. Based on his investor portal statements and 2025 tax documents, he believed he owned the equivalent of 2,500 SpaceX shares heading into the IPO. At the IPO price, he calculated that stake would have been worth more than $300,000.

Instead, Rupireddy says Late Stage told him the underlying shares had actually been sold in 2024. His payout: roughly $45,450, a fraction of what he thought he was sitting on.

"The plan was to fund college education for both of my kids," Rupireddy said, according to the Journal, after he filed a complaint with the Securities and Exchange Commission. He says he never got any notice the position had been sold. He only found out after he temporarily lost access to Late Stage's investor portal, and when access returned, the portal showed the position had already been liquidated.

A second investor, who didn't want to be named, told the Journal he had the identical experience. He believed he still held pre-IPO SpaceX exposure right up until after the company's public debut, only to be informed afterward that the shares underneath his investment had been sold off years before. He's since joined other investors pursuing legal action, and told the paper that both an SEC attorney and an FBI special agent have reached out to discuss what happened to him.

The Journal reports at least four investors have described nearly identical situations. Roughly 150 Late Stage investors have reportedly formed a group chat to compare notes and figure out collectively what happened to their money.

Established facts and open questions

Investors have filed complaints with the SEC, at least one federal agent has made contact with an investor, and multiple people independently describe the same pattern. They believed they held SpaceX exposure, then learned after the IPO that shares had been sold in 2024 without notice.

What remains unestablished is whether Late Stage Management or anyone there broke the law, misrepresented anything intentionally, or violated the terms of the fund documents these investors signed. No charges have been filed. No SEC enforcement action has been announced. Late Stage Management's response to these specific allegations isn't reflected in available reporting.

SPV agreements sometimes give managers discretion to sell underlying positions, rebalance, or exit early, and investors don't always read that fine print closely when they're excited about owning a piece of SpaceX. Late Stage may have had contractual authority to sell in 2024. If so, the real complaint may be about disclosure and communication rather than the sale itself. Investors say they got portal statements and tax documents in 2025 that reflected shares they no longer actually owned, which is the part that looks worst regardless of what the contract technically permitted.

A breach of contract or fraud claim is different from a disclosure failure, and regulators will need to sort out which one this is, if either.

For now, the people out real money are watching an SEC complaint process and, in at least one case, an FBI inquiry, with no resolution in sight and no findings issued.