SpaceX IPO set to lock in Elon Musk’s control with Mars-linked pay deal

{"text":[[{"start":12.25,"text":"SpaceX has proposed one of the most aggressive corporate governance regimes in US history, intending to guarantee Elon Musk cannot be fired and offering a trillion-dollar pay deal linked to building a colony on Mars."}],[{"start":25.8,"text":"The unprecedented structure has not deterred investors, who are overlooking weak shareholder rights and a science-fiction business strategy for a chance to own a “unique” company headed for the largest ever IPO."}],[{"start":37.8,"text":"Musk is targeting a listing next month to coincide with a rare alignment of planets, his 55th birthday on June 28 and ahead of the 250th anniversary of the US on July 4. While figures are still fluid, the rocketmaker has discussed raising about $75bn at a $1.75tn valuation."}],[{"start":59.199999999999996,"text":"“From a strict corporate finance perspective, the valuation makes no sense. But Elon is great at getting people to dream,” said a person advising on the deal. “Large asset managers are very keen on this IPO. There is a lot of demand and a lot of Elon fans.”"}],[{"start":75.64999999999999,"text":"After battles over pay at Tesla and previously failing to gain control over OpenAI, the start-up he co-founded, Musk is moving to lock in a governance structure that will shield him from challenges at SpaceX."}],[{"start":89.14999999999999,"text":"Officials responsible for New York and California public pension funds this week wrote to SpaceX expressing “serious concerns” over what they called “the most management-favourable governance structure ever brought to the US public market at this scale”."}],[{"start":104.05,"text":"Musk would control a supermajority of class B stock with 10 times the voting power of ordinary shares, according to people familiar with last month’s confidential S-1 filing with the US Securities and Exchange Commission."}],[{"start":117.05,"text":"Disclosures show that the world’s richest man already owns at least 40 per cent of the shares and more than 80 per cent of the voting power of the start-up he founded in 2002, the people said."}],[{"start":null,"text":"

"}],[{"start":128.1,"text":"Musk will hold the roles of chief executive and chair of the nine-person board of directors of SpaceX. Gwynne Shotwell — widely seen as his more grounded “get-shit-done” counterpart — will remain president and chief operating officer."}],[{"start":142.9,"text":"The prospectus warns potential investors that Musk can only be removed by class B shareholders, and that he will “continue to control the election and removal” of directors as long as he holds his stake. This “will limit or preclude ‌your ability ⁠to influence corporate matters”."}],[{"start":160.65,"text":"SpaceX will also require “mandatory arbitration” for shareholder disputes, eliminating the risk of the protracted public lawsuits he faced in Delaware and California about Tesla and Twitter."}],[{"start":173.45000000000002,"text":"Musk reincorporated his companies in Texas after his pay package was voided by a judge in Delaware, who deemed the board “supine” and too beholden to Musk to properly oversee him. His stock options were reinstated on appeal."}],[{"start":189.05,"text":"Investors pointed to SpaceX’s near monopoly on commercial rocket launches and the fast-growing Starlink satellite internet business as reasons to overlook Musk’s dominance of its governance."}],[{"start":200.10000000000002,"text":"SpaceX accounted for more than 80 per cent of global rocket launches last year and is developing the reusable Starship rocket system for Mars missions."}],[{"start":209.40000000000003,"text":"Starlink has more than 10,000 satellites in orbit, allowing it to build a business with more than $10bn in revenue by selling internet access to individuals and businesses such as airlines and cruise ships as well as mobile phone providers."}],[{"start":225.50000000000003,"text":"“It’s a truly unique business with the deepest moat that exists today,” said one investor. “This company launches over 90 per cent of western payload into space each year. It’s like if you own the only undersea cable from the US to Europe, it’s the only way you can get internet.”"}],[{"start":null,"text":""}],[{"start":null,"text":""}],[{"start":242.95000000000002,"text":"Musk will further entrench his control if he hits a series of share price targets linked to moonshot goals. The structure echoes his potential $1tn pay package at Tesla, which is contingent on him sextupling the EV-maker’s valuation and selling millions of AI-powered humanoid robots."}],[{"start":261.35,"text":"In January, SpaceX’s board approved a package that could see Musk awarded as many as 200mn in class B shares if the company grows to $7.5tn and establishes a 1mn-strong human colony on Mars, people familiar with the confidential disclosures said. "}],[{"start":279.6,"text":"The stock will vest in tranches linked to $500bn increases in SpaceX’s market capitalisation. Reuters first reported details about the Martian base."}],[{"start":291.70000000000005,"text":"Musk could also get up to 60mn more super-voting restricted shares if SpaceX reaches a $6.6tn valuation and builds a network of data centres in space that is capable of delivering 100 terawatts of computing capacity, the people said. The biggest terrestrial data centres currently deliver one to two gigawatts."}],[{"start":313.25000000000006,"text":"“As crazy as some of these numbers are, I respect the fact that he ties his own outcomes very directly to the outcomes of the business,” said another investor. “We could all argue whether one should make that much money. But the reality is, if he creates these gigantic companies, I’m personally totally fine with it.”"}],[{"start":null,"text":""}],[{"start":332.25000000000006,"text":"The S-1 filing also provides an insight into the company’s recent financial performance, which has since become muddied by a series of deals with Musk’s empire."}],[{"start":341.40000000000003,"text":"First he merged social media platform X with start-up xAI in March 2025, then combined both with SpaceX in February in a deal valuing the whole entity at $1.25tn."}],[{"start":355.15000000000003,"text":"The picture was further complicated by an agreement last month that gives SpaceX the right to acquire AI coding start-up Cursor for $60bn this year. If not finalised, Musk has to pay a $10bn termination fee."}],[{"start":369.35,"text":"While SpaceX made a profit of $791mn on $14bn of revenue in 2024, it fell to a $4.9bn loss last year despite increasing revenue to $18.7bn. This was the result of the combination with xAI, which is spending huge sums to construct two vast “Colossus” data centres filled with Nvidia chips in Tennessee."}],[{"start":395.85,"text":"The AI lab lost $6.4bn in 2025, up from $1.6bn in 2024. This was balanced by Starlink, which posted operating profit of $4.4bn last year, up from $2bn in 2024."}],[{"start":411.65000000000003,"text":"SpaceX did not respond to an email seeking comment."}],[{"start":null,"text":""}],[{"start":414.95000000000005,"text":"Musk has sought to improve the optics ahead of the IPO by renting one of xAI’s Memphis supercomputers to Anthropic."}],[{"start":422.80000000000007,"text":"The deal “obviously makes the near-term numbers look a little better”, said one shareholder, who estimates Anthropic could be paying as much as $5bn a year to SpaceX. Investors believe the deal will “give them a little bit of extra pixie dust”."}],[{"start":437.8500000000001,"text":"Venture capital firms and institutional investors are set for a windfall from the listing. Some have waited more than two decades to realise investments in the start-up, which flirted with bankruptcy in its early years."}],[{"start":450.80000000000007,"text":"The IPO will also be a fee bonanza for the investment banks and law firms hired by Musk."}],[{"start":457.1500000000001,"text":"Bank of America, Citigroup, Goldman Sachs, JPMorgan Chase and Morgan Stanley are leading a group of more than 20 global banks. People familiar with the matter said that Michael Grimes — a close Musk ally, who returned to Morgan Stanley in February after a year working in the Trump administration — is the central person running the deal. "}],[{"start":478.4000000000001,"text":"Some fret that the largest IPO of all time — which could eclipse Saudi Aramco’s $29bn raised at a $1.7tn valuation in 2019 — will be hard for the market to absorb. Funds may retain capital for OpenAI and Anthropic, which are also expected to raise tens of billions this year."}],[{"start":498.55000000000007,"text":"However, the trio should benefit from the speedy inclusion into indices that will ensure flow into its shares. The Nasdaq 100, tracked by more than $600bn of investor money, was the first big index to change its rules, allowing the very largest newly listed companies to join in as little as 15 trading days after their IPO."}],[{"start":519.5500000000001,"text":"“It will be impossible to not own them . . . This will be really helpful for demand,” said an adviser on the deal. "}],[{"start":526.35,"text":"“The market is deep. Institutional investors have $270bn of dry powder on the sidelines,” added another adviser. "}],[{"start":534.8000000000001,"text":"Bankers are also expected to allocate a large tranche of shares to retail investors through brokerages. Tesla has an unusually high proportion of retail shareholders for a $1.4tn public company at about 30 per cent."}],[{"start":548.5500000000001,"text":"“Musk is a big fan of retail, he wants their participation,” said Yuri Khodjamirian, a portfolio manager with about $54mn of SpaceX shares in his Nasa exchange traded fund. “They need to create demand for shares — we’ve never had an IPO of this size before.”"}],[{"start":566.6,"text":"A venture capitalist who has backed X, xAI and SpaceX said that Musk — however divisive his political and social views are — will have no shortage of buyers."}],[{"start":577.15,"text":"“I am not saying our investment process is to just give him money for anything he wants,” they said. “But to be honest that wouldn’t have been a bad strategy: never bet against Elon.”"}],[{"start":594.9499999999999,"text":""}]],"url":"https://audio.ftcn.net.cn/album/a_1778847736_6435.mp3"}