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Musk to Retain Firm Control of SpaceX After Public Listing
Elon Musk is positioned to maintain significant control over SpaceX even after its initial public offering, benefiting from supervoting shares and Texas law. This structure is similar to those at Google and Facebook.
Elon Musk holds substantial power within SpaceX, creating a governance structure that renders his removal or major corporate policy shifts nearly impossible without his consent. This control is not expected to change following the company's initial public offering.
Musk is set to command an unprecedented level of influence over the company, which analysts estimate could reach a valuation of at least $1.5 trillion. As chairman and chief technical officer, Musk controls approximately 85% of the voting power for the satellite builder, rocket-launch provider, and artificial intelligence developer. This arrangement addresses previous frustrations Musk encountered while leading Tesla.
Supervoting shares and Texas law will impede efforts to remove the CEO and limit investor lawsuits. In his 16 years on Wall Street, the electric vehicle maker has been a frequent target of shareholder lawsuits and calls for his dismissal. Musk has voiced displeasure with running a public company at times.
SpaceX's ownership framework grants varying rights to different investor classes. Individual investors will be able to purchase Class A shares, each carrying one vote. However, Class B shares, which Musk primarily holds, will carry 10 votes per share, according to securities filings. This structure mirrors the approaches taken by Google and Facebook before their public listings, which provided founders with considerable control. In those instances, shareholders could pursue legal action in Delaware, where the companies were incorporated, or sell their shares. SpaceX, however, imposes restrictions on shareholder actions.
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