As Elon Musk's SpaceX moves closer to what could become one of the biggest stock market debuts in history, opposition to the company's proposed public offering is beginning to grow. In recent weeks, a major Danish pension fund, senior public investment officials in the United States, and one of America's largest teachers' unions have all raised concerns about the governance structure of the rocket company and the level of control Musk is expected to retain after the IPO.
Danish Pension Fund Blacklists SpaceX IPO
AkademikerPension, one of Denmark's largest pension funds with about $25 billion in assets under management, has announced that it will boycott the SpaceX IPO. According to Bloomberg, the fund has blacklisted the company, stating that SpaceX is "grossly overvalued." The fund said it would avoid investing even if the valuation were lower because of concerns about shareholder rights and accountability. Anders Schelde, the fund's chief investment officer, stated in an email that SpaceX is not only grossly overvalued but also hindered by a catastrophic governance structure. He emphasized that even if the financial valuation were reasonable, the fund would still feel compelled to exclude SpaceX from its portfolio. This decision stems from the expectation that Musk will command roughly 80% of the company's voting rights while simultaneously acting as chief executive, chief technology officer, and chairman of the board.
According to AkademikerPension's independent calculations, SpaceX cannot reasonably exceed a valuation of $1 trillion, leading Schelde to conclude that the fund could not justify participating in the IPO from an investment-return perspective. The fund warned that investors are effectively being asked to accept an unprecedentedly low risk premium for a highly uncertain company where pricing appears to be driven more by Musk's narratives than by actual economic realities. Schelde clarified that the decision is not a reflection of the quality of SpaceX's technology or engineering expertise, noting that the fund would otherwise like to invest in its innovations if the valuation and governance risks were mitigated.
US Public Investment Officials Voice Concerns
Earlier this month, New York City Comptroller Mark Levine joined New York State Comptroller Thomas P. DiNapoli and California Public Employees' Retirement System CEO Marcie Frost in sending a letter to SpaceX executives. Together, the three institutions oversee more than $1 trillion in assets on behalf of millions of public workers, including teachers, firefighters, police officers, and nurses. In the letter, the investors warned that the governance structure reportedly planned for SpaceX could weaken transparency and limit shareholder protections. Levine said there were "many glaring governance red flags including a lack of genuine checks and balances for Elon Musk as CEO," while DiNapoli said the structure could leave shareholders with "virtually no recourse" over how the company conducts business.
The letter detailed several key concerns. First, the principle of one share, one vote is undermined by the proposed dual-class structure, where Class B shares concentrated in Musk and insiders carry 10 votes per share, while Class A shares offered to the public carry only one vote. This would give Musk approximately 79% of voting power while holding only about 42% of equity. Second, the governance structure reportedly makes Musk unfireable without his own consent, as his removal would require a vote of Class B holders, which he controls. Third, mandatory arbitration of shareholder claims would eliminate class-action lawsuits, a key mechanism for remedying widespread harms. Fourth, SpaceX's reincorporation under Texas law allows for high thresholds for derivative actions, effectively eliminating shareholder-led accountability. The letter urged SpaceX to adopt a one-share, one-vote structure, eliminate CEO removal provisions, ensure a majority-independent board, and drop mandatory arbitration.
Teachers' Union Urges SEC Scrutiny
Randi Weingarten, president of the American Federation of Teachers (AFT), recently wrote to the US Securities and Exchange Commission (SEC), urging regulators to closely examine SpaceX's governance framework before the company begins trading publicly. The AFT represents 1.8 million education, healthcare, and public sector workers whose retirement security relies on broad market exposure. Weingarten highlighted several areas for SEC scrutiny, including disclosure of risk factors around SpaceX's ability to generate earnings at a reported valuation of 200 times cash flows, accounting practices with potential non-GAAP issues, and governance concerns with a board lacking independence. She also raised concerns about Nasdaq's "fast entry" rule that could force index fund investors to hold SpaceX shares shortly after the IPO, potentially magnifying forced holdings.
Weingarten noted that SpaceX, at a reported target valuation of $1.75 trillion, would be trading at roughly 95 times trailing revenue of $18.5 billion, far exceeding typical multiples. She also pointed to accounting practices described as "more of an art than a science" and the lack of independent sell-side research due to 21 banks involved in underwriting. The AFT requested the SEC to thoroughly examine the S-1 filing and ensure compliance with securities laws.
Growing Opposition Ahead of IPO
The concerns have now spread beyond investment groups. Together, the objections signal that while investor interest in SpaceX remains strong, questions about governance, accountability, and shareholder rights are emerging as key issues ahead of the company's highly anticipated IPO. The opposition highlights the tension between SpaceX's extraordinary technical achievements and the governance structure that critics say concentrates too much power in Elon Musk, potentially at the expense of public shareholders.
