A tender offer is a public offer to buy a stated number of shares from existing holders at a fixed price within a fixed window, used by private companies as the controlled way to let employees and early investors sell stock before an IPO.
In plain terms
Private company shares are hard to sell. Most stock plans forbid transfers outright, and even where they do not, a buyer must be found, a price agreed, and the board’s consent obtained. A tender offer inverts that: instead of holders hunting for buyers, one buyer — the company itself, or an investor it has arranged — announces a single price and invites everyone eligible to sell into it. Everyone gets the same terms, the company controls who ends up on the cap table, and employees holding illiquid paper can turn some of it into money without waiting for an IPO.
How it works
There are two shapes. In an issuer tender offer the company buys its own shares, governed for public companies by Exchange Act Rule 13e-4. In a third-party tender offer an outside investor buys directly from employees — really a financing with the money routed to shareholders instead of the balance sheet. Companies that run these on a cycle, SpaceX roughly twice a year, treat them as a feature of employment rather than an event.
Even a private company running a self-tender sits inside the federal tender-offer rules. Rule 14e-1 applies to any tender offer, registered or not, and has historically required the offer to stay open at least 20 business days, and 10 business days after any change in price.
That baseline moved recently. On April 16, 2026 the SEC’s Division of Corporation Finance issued an exemptive order permitting a minimum offering period of 10 business days for qualifying equity tender offers — including offers by non-reporting issuers for their own shares, provided the consideration is cash at a fixed price and changes in terms are notified on the specified timetable. For private-company self-tenders the standard window is now half what it was.
Eligibility is set by the company, not by law: offers commonly restrict participation by tenure, by share class, or by how many shares any one person may sell.
The numbers
- Minimum offering period: 20 business days under Rule 14e-1(a); 10 business days for qualifying equity offers under the SEC’s April 16, 2026 exemptive order.
- Minimum period after a price change: 10 business days under Rule 14e-1(b).
- Typical cadence at companies that run them: twice a year.
- SpaceX, July 2025: $212 per share, valuing the company at roughly $400 billion.
- SpaceX, December 2025: $421 per share, valuing the company at roughly $800 billion — a doubling in five months, on the same shares (Fortune).
- Jurisdiction: United States federal securities law. State blue-sky rules and the company’s own stock plan apply on top.
What people get wrong
That the tender price is the value of the shares. It is one buyer’s price for a limited number of shares, at a moment, under terms the company set — and the same company is simultaneously carrying a much lower 409A valuation used to price option strikes. The two numbers measure different things, but employees routinely multiply the tender price by their whole holding and treat the result as net worth. Twelve months later the next tender can arrive at half the price, or not arrive at all.
The tax point is sharper. Proceeds from selling shares already owned are capital gain, but if a company buys shares from its own employees at more than fair market value, the excess is treated as compensation — ordinary income, reported on a W-2, employment taxes included. Whether a given tender is a stock sale or a partly disguised bonus turns on facts the employee cannot see, and the answer arrives in January on a tax form rather than in the offer documents.
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See also: Liquidity event · RSU · Secondaries · Accredited investor