A new IPO filing from SpaceX, the American rocket firm, has revealed the extent of control held by its founder and CEO, Elon Musk. The document revealed that Musk cannot be removed as CEO or chairman of the company without his own approval.
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Forget margin or options. Here's how the pros trade TSLAThe disclosure comes as SpaceX gets ready to go public, raising fresh questions about how the firm is run and who controls it. Notably, some experts estimate that SpaceX could target a valuation near $1.75 trillion after its public debut. Others suggest a post-IPO valuation of up to $2 trillion.
Super-Voting “Class B” Shares Give Musk Majority Control
According to the filing, Musk’s control over SpaceX comes from a special “dual-class” share setup, which the rocket firm plans to impose after its IPO. Under this system, Class A shares will be given to public investors, while Class B shares, which carry more voting power, will be held by insiders.
Musk is expected to hold the Class B shares, each of which is worth 10 votes. This means he would have the final say if anyone tries to remove him from SpaceX. The filing notes that he “can only be removed… by the vote of Class B holders,” which effectively keeps power in his hands.
The filing also adds that if Musk holds a large portion of these shares for a long time, he could continue to control board decisions. In other words, he could decide who gets chosen or removed as a director. SpaceX and Musk did not respond to requests for comment.
SpaceX Faces Scrutiny Over Musk’s Control Setup
The unusual dual-class setup has drawn attention from experts. While this type of system is common in tech firms, experts say SpaceX’s version goes further. They say it gives investors little say in leadership decisions, even though they are putting in capital.
However, the firm has warned of these risks, noting that Musk’s control could outweigh the interests of other shareholders. At the same time, the setup may let SpaceX avoid some standard rules, such as having a fully independent board, except for audit checks. For Musk, this also means he is less likely to face pressure to step down as CEO, as he once did at Tesla (TSLA).
At the moment, SpaceX’s IPO filing is still private and not final. During this stage, the company will keep working with the U.S. Securities and Exchange Commission (SEC). The commission will review the filing and may ask for more changes before giving approval.
Is SpaceX a Good Investment?
SpaceX is set to become the largest IPO in history once it goes public this year. The private company is estimated to reach a valuation of $2 trillion. Recent reports also suggest that SpaceX may be targeting a June listing, with plans to raise about $75 billion in the IPO. For more information and analysts’ insights on SpaceX ahead of its IPO, visit the TipRanks Private Company Center.
