SpaceX has proposed one of the most aggressive corporate governance structures in U.S. corporate history, designed to ensure Elon Musk cannot be dismissed and to introduce a compensation plan potentially worth trillions of dollars, tied to a Mars colonization initiative.
This unprecedented governance framework has not deterred investors, who are overlooking weaker shareholder rights and a science-fiction-like business strategy in pursuit of shares in what they view as a "one-of-a-kind" company poised for the largest initial public offering ever.
Musk plans for the company to go public next month, timing it around a rare planetary alignment, his 55th birthday on June 28, and the eve of the U.S. 250th anniversary on July 4. While the valuation figure remains fluid, the rocket company has discussed raising approximately $75 billion at a valuation of $1.75 trillion.
An advisor involved in the deal stated, "From a strict corporate finance perspective, this valuation makes no sense. But Elon is very skilled at getting people to follow his vision. Large asset managers are highly interested in this IPO; there is strong market demand and a significant number of Elon's fans."
Following previous controversies over his compensation at Tesla Motors and his inability to gain full control over OpenAI, which he co-founded, Musk is now securing a governance structure for SpaceX that protects him from being challenged.
This week, heads of public pension funds in New York and California sent a letter to SpaceX expressing "serious concern" over what they termed "the most management-favored governance structure of its scale in the history of the U.S. public markets."
According to informed sources, in a confidential S-1 filing submitted to the U.S. Securities and Exchange Commission last month, Musk will control an absolute majority of Class B shares, with each share carrying 10 times the voting power of common stock.
The disclosure documents show that the world's wealthiest individual already holds at least a 40% stake in the company, founded in 2002, and commands over 80% of the voting rights, sources said.
Musk will serve simultaneously as SpaceX's Chief Executive Officer and Chairman of its nine-member board. Gwynne Shotwell, widely regarded as his pragmatic and capable partner, will continue as President and Chief Operating Officer.
The prospectus warns potential investors that Musk can only be removed by Class B shareholders; as long as his shareholding remains unchanged, he will "continuously control the election and removal of directors," which "will limit or preclude your ability to influence corporate matters."
SpaceX will also require that shareholder disputes be resolved through mandatory arbitration, avoiding a repeat of the public lawsuits Musk faced in Delaware and California related to Tesla Motors and Twitter.
A Delaware judge previously invalidated a Musk compensation package, criticizing the board as "weak, overly dependent on Musk, and failing to provide effective oversight"; the decision was later appealed and his options were reinstated. Subsequently, Musk reincorporated several of his companies in Texas.
Investors believe that SpaceX's near-monopoly in commercial rocket launches and the rapid growth of its Starlink satellite internet business are sufficient to offset Musk's absolute dominance over corporate governance.
Last year, SpaceX conducted over 80% of global rocket launch missions and is developing the reusable Starship system for Mars missions.
Starlink has more than 10,000 satellites in orbit, with annual revenue exceeding $10 billion from providing internet access to individuals, airlines, cruise ships, and mobile operators.
One investor remarked, "This is a truly unique business with the deepest moat. This company handles over 90% of Western payload launches to space annually. It's like owning the only transatlantic submarine cable for internet traffic."
Musk's control could be further solidified if he achieves a series of "moonshot-level" stock price targets. This mechanism mirrors his potential trillion-dollar compensation plan at Tesla Motors—which requires Tesla's valuation to grow sixfold and for it to sell millions of AI humanoid robots.
In January, the SpaceX board approved a plan granting Musk up to 200 million Class B shares if the company reaches a valuation of $7.5 trillion and establishes a colony of one million people on Mars, sources familiar with the matter said.
The shares will be granted in tranches for every $500 billion increase in SpaceX's market capitalization. Reuters first reported details related to the Mars base.
Sources added that if SpaceX's valuation reaches $6.6 trillion and it builds a space-based data center network capable of providing 100 terawatts of computing power, Musk could receive an additional 60 million super-voting restricted shares. Currently, the world's largest ground-based data centers offer only 1 to 2 gigawatts of computing power.
Another investor stated, "These numbers seem insane, but I respect his approach of deeply tying his personal returns to the company's performance. We can debate whether he should get this much money, but the reality is, as long as he builds these giant enterprises, I personally accept it completely."
The S-1 filing also disclosed the company's recent financials, though a series of transactions within Musk's corporate empire have complicated the data.
In March 2025, Musk merged the social media platform X with the AI startup xAI; in February of this year, he merged both entities into SpaceX, valuing the combined entity at $1.25 trillion.
Last month, another agreement was signed: SpaceX has the right to acquire AI code company Cursor for $60 billion this year. If the deal falls through, Musk must pay a $10 billion penalty.
In 2024, SpaceX reported revenue of $14 billion and a profit of $791 million; last year, revenue increased to $18.7 billion, but the company incurred a loss of $4.9 billion, primarily due to the incorporation of xAI—which is investing heavily in building two massive "Gigafactory" data centers equipped with Nvidia chips in Tennessee.
xAI reported a loss of $6.4 billion in 2025 (compared to $1.6 billion in 2024); Starlink reported an operating profit of $4.4 billion last year (compared to $2 billion in 2024), providing a counterbalance.
SpaceX did not respond to a request for comment.
To enhance its market image ahead of the IPO, Musk leased xAI's Memphis supercomputer to AI company Anthropic.
A shareholder noted, "This deal clearly makes the short-term financials look better." He estimates Anthropic may pay SpaceX $5 billion annually, and investors believe this move will add a "halo effect" to the IPO.
Venture capital and institutional investors stand to reap significant returns from this listing, with some having waited over two decades to realize gains—SpaceX was on the brink of bankruptcy in its early years.
The IPO will also generate substantial fees for the investment banks and law firms hired by Musk.
Bank of America, Citigroup, Goldman Sachs, JPMorgan Chase, and Morgan Stanley are leading a consortium of over twenty global banks. Sources say Michael Grimes, a core ally of Musk who returned to Morgan Stanley in February 2025 after leaving the Trump administration, is a key lead on this IPO.
Some worry the market may struggle to absorb this historic IPO—potentially surpassing Saudi Aramco's 2019 offering which raised $29 billion at a $1.7 trillion valuation—as capital could also flow to OpenAI and Anthropic, both of which also plan to raise tens of billions this year.
However, all three companies are expected to be quickly included in major indices, ensuring a steady inflow of passive funds. The Nasdaq-100 Index, tracked by funds exceeding $600 billion, has already amended its rules to allow the inclusion of large new listings after just 15 trading days.
An advisor stated, "Investors cannot afford not to hold it, which is very favorable for demand."
Another advisor added, "There is sufficient market capacity; institutional investors are sitting on $270 billion in idle cash."
Investment banks plan to allocate a significant portion of shares to retail investors through brokerages. Tesla Motors, with a $1.4 trillion market cap, has a retail ownership proportion as high as 30%.
Yuri Hojamirian, a fund manager at the Nasa ETF, which holds approximately $54 million in SpaceX shares, said, "Musk places great importance on retail investors and wants them to participate. This IPO is of an unprecedented scale; we must create market demand."
A venture capitalist who has invested in X, xAI, and SpaceX stated that despite the significant controversy surrounding Musk's political and social views, the IPO will have no shortage of buyers.
He said, "We're not giving money blindly, but honestly, betting against Elon has never been a winning strategy."
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