The Biggest Tech IPOs in History Are Here. Your Tax Window Is Closing.

By Alton Moore, Esq, CPA

he largest wave of technology IPOs in history is underway. SpaceX went public on June 12, 2026 at $135 per share, the biggest initial public offering in United States history, and its primary employee lock-up expired on August 6. Anthropic has filed to go public and is targeting October. Cerebras and Quantinuum have already priced this year, and Databricks and Discord are widely expected to follow.

For the employees holding equity at these companies, the financial event is easy to see. The tax consequences are not. A liquidity event turns paper wealth into taxable income, often before any cash reaches your account.

The decisions that determine how much of that equity survives as after-tax wealth are not made after the IPO. They are made in the months before it, and several of them carry deadlines that pass without any reminder.

The exposure concentrates in four places: the alternative minimum tax when you exercise incentive stock options, the ordinary income when RSUs vest, the lock-up that arrives before you can sell, and the way California taxes a QSBS gain. Each is manageable, but the moves that matter happen before the offering.

Four pressure points before the IPO

Non-qualified stock options are the simplest case, taxed as ordinary income the moment you exercise. The harder problems come from incentive stock options, RSUs, the lock-up, and California, and none of them is obvious until it arrives.

The AMT surprise when you exercise ISOs

Exercising incentive stock options before an IPO can trigger the alternative minimum tax even when you sell nothing. The spread between your exercise price and the fair market value is left out of regular income tax under §422, but §56(b)(3) pulls it into your alternative minimum taxable income. For an employee who exercises a large block in a single year, that AMT bill can run into six figures, and it arrives well before any sale proceeds do. How the AMT works on exercise, and why paying it can convert future appreciation into capital gain, is covered in our pre-IPO equity tax planning guide.

RSU income that lands before you can sell

Restricted stock units convert into shares of common stock once they vest, and that vesting is what creates ordinary income. At most private companies the vesting is double-triggered, requiring both a time or service condition and a liquidity event such as the IPO, so a large block can become ordinary income all at once, valued at the IPO-day price. The top combined federal and California rate on that income can approach 50%, and ordinary payroll withholding rarely covers it. Many employees are surprised that the tax comes due before they are allowed to sell the shares that created it. Our guide to pre-IPO equity tax planning breaks down RSU income timing and the withholding gap.

The lock-up cash trap

Most IPOs impose a lock-up period, commonly 90 to 180 days, during which employees cannot sell. An employee who exercised ISOs before the offering can be holding appreciated shares, and an AMT liability already incurred, while contractually barred from selling anything to pay it. Planning around the lock-up window, not just the exercise decision, is one of the most overlooked parts of pre-IPO tax strategy. The lock-up section of our equity tax guide covers the strategies available before and after the window closes.

QSBS, and what California does to it

Employees who exercised while the company’s gross assets were still under $75 million may hold qualified small business stock under §1202, where the federal exclusion can reach 100% of the gain on qualifying shares. California does not conform to §1202 and taxes the full gain as ordinary income no matter how long the shares were held. For an employee who still lives in California, that opens a federal-versus-state split. For one who has genuinely moved, the picture can look very different. The full analysis, including how California sources qualifying ISO gains, is in the cornerstone guide.

The clock is already running

These decisions share one feature. They have deadlines, and the deadlines do not move just because the IPO timeline slips. A §83(b) election on early-exercised stock has to be filed within 30 days of the transfer, and the window cannot be extended. An AMT strategy built around ISOs depends on knowing the company’s 409A valuation before you exercise, which means engaging a tax advisor before the S-1 is public, not after. A California residency change, for anyone weighing a move before a sale, has to be real and complete before the disposition, because a nominal address change does not satisfy the Franchise Tax Board.

There is an estate dimension that is easy to miss as well. Employees facing a first large liquidity event rarely have a wealth transfer plan that fits the money that is coming, and that planning works far better before the proceeds arrive than after.

More names are coming

The wave is not limited to the companies already public. Databricks and Discord are among the names widely expected to list in the near term, though neither has confirmed its timing, and more AI companies are expected to follow through 2027. Liquidity does not always arrive through an IPO either. A company-sponsored tender offer can turn vested equity into taxable income before any public listing, on a shorter and less predictable timeline. The mechanics do not change with the company name. Any employee at a late-stage private company with a meaningful equity position faces the same decisions on the same kind of timeline.

Where to start

The tax bill is not fixed. Spreading ISO exercises across more than one year, staging share sales, and gifting appreciated stock through a donor-advised fund can each reduce it, and our guide walks through these in its offsetting strategies section.

If you hold incentive stock options, non-qualified options, or RSUs at a company approaching a liquidity event, these questions are worth resolving before the event rather than after. A consultation with a tax attorney and CPA who works with equity compensation is the right starting point, ideally before the roadshow rather than once the stock is trading. You can schedule a consultation to map your equity and model the tax while the decisions are still open.

This article is for informational purposes only and does not constitute legal or tax advice. Tax laws and regulations change frequently and may affect the accuracy of this information. Consult a qualified tax attorney or CPA before making any decisions based on the content of this article.