SpaceX is set to debut on stock exchanges on June 12, but institutional investors are raising red flags about its corporate governance. Morningstar's Lindsey Stewart told ESG Dive that concerns center on the company's dual-class share structure and board composition. The IPO, expected to raise $75 billion, comes as SpaceX expands its operations to include Starlink, xAI, and space exploration ventures. PitchBook values the company at $1.75 billion, though the IPO size dwarfs that figure.
The dual-class share structure, which grants Elon Musk and insiders significant control, has drawn scrutiny. Stewart noted that SpaceX's governance model has long deviated from conventional norms, a pattern also seen at Musk's other ventures. Investors worry this could lead to conflicts in the future, particularly as the company transitions to public ownership. "There's concerns over the dual class share scheme," Stewart said, adding that the board's makeup also raises questions.
SpaceX's IPO is a major event for Brevard County, where the company operates from Kennedy Space Center. The launch of the Polaris Dawn mission earlier this year highlighted the area's role in SpaceX's ambitions. However, the IPO's scale and structure have sparked debates about how the company will balance investor interests with Musk's influence.
The timing of the IPO, just weeks after SpaceX's recent launch attempts, adds to the scrutiny. Institutional investors are closely watching how the company addresses governance issues as it prepares to list. With the IPO expected to attract both retail and institutional buyers, the outcome could shape SpaceX's trajectory in the public markets.