Danish Pension Fund Rejects SpaceX IPO Over Governance

AkademikerPension, which manages about $25 billion in assets, will not take part in SpaceX’s planned initial public offering. The fund’s chief investment officer, Anders Schelde, wrote in an email that governance and valuation concerns make the company unacceptable as an investment.

The pension fund described SpaceX’s governance framework as “catastrophic” and “exceptionally poor.” It noted Elon Musk is expected to retain more than 80% of the company’s voting rights while serving as chief executive officer, chief technology officer and chair, and said that concentration of power weakens accountability and shareholder oversight.

On valuation, SpaceX is targeting at least a $1.8 trillion valuation for the IPO. AkademikerPension’s internal calculations place a reasonable ceiling near $1 trillion and indicate expected returns would not compensate for the risks. The fund stated it would blacklist SpaceX even if the offering came at a lower valuation.

SpaceX is expected to begin formal IPO marketing as soon as June 4, with pricing possibly as early as June 11. The offering is led by Goldman Sachs, Morgan Stanley, Bank of America, Citigroup and JPMorgan, together with 18 other banks.

AkademikerPension has previously taken public positions on governance and political risk. Last year it sold its stake in Tesla because of concerns about Musk’s impact on the company’s brand and value. Earlier this year the fund reduced holdings of US Treasuries, citing doubts about US government credit.

The fund indicated that other institutional investors share its concerns about SpaceX’s governance structure and the level of valuation being sought.