SpaceX aims for a trillion-dollar IPO next month; Musk sets rules to ensure he cannot be removed

Source: Global Market Report

SpaceX has proposed one of the most radical corporate governance structures in American business history, designed to ensure Elon Musk cannot be fired, and has unveiled a compensation plan tied to the Mars colonization project, worth trillions of dollars.

This unprecedented governance structure has not deterred investors, who have disregarded the relatively weak shareholder rights and sci-fi-like business strategy in order to obtain shares of a “unique” company set for the largest IPO in history.

Musk’s plan to go public next month coincides with a rare planetary alignment, his 55th birthday (June 28), and the eve of the United States’ 250th anniversary (July 4). Although the valuation figure remains in flux, the rocket company has discussed raising about $75 billion at a valuation of $1.75 trillion.

A consultant involved in the deal said: “From a strict corporate finance perspective, this valuation makes no sense. But Elon is very good at inspiring people to follow his dreams. Large asset management firms are showing keen interest in this IPO, demand is high, and there are also many Elon fans.”

After Tesla's pay controversy, and failing to fully control his co-founded OpenAI, Musk is locking in a governance structure at SpaceX that can shield him from challenges.

This week, the heads of New York and California public pension funds sent a letter to SpaceX, expressing “grave concern” over what they called “the most management-favoring structure of its size in U.S. public market history.”

According to sources, in a confidential S-1 filed with the SEC last month, Musk will control an absolute majority of class B shares, each carrying 10 times the voting power of a regular share.

Sources said disclosure documents show that the world’s richest man already owns at least 40% of the company founded in 2002, with over 80% of voting rights.

Musk will serve as both CEO and chairman of SpaceX’s nine-member board. Gwynne Shotwell, widely seen as his pragmatic right hand, will continue as president and COO.

The prospectus warns potential investors: Musk can only be removed by class B shareholders; as long as he maintains his shareholding, he will “continuously control director elections and removals,” which “will limit or eliminate your ability to influence company affairs.”

SpaceX will also require shareholder disputes to be resolved through mandatory arbitration, to avoid public lawsuits like those Musk faced regarding Tesla and Twitter in Delaware and California.

A Delaware judge previously ruled Musk’s compensation invalid, criticizing the board as “weak, overly dependent on Musk, and failing at effective oversight”; an appeal later restored his options. Since then, Musk has re-registered many of his companies in Texas.

Investors believe SpaceX's near-monopoly of commercial rocket launches and the rapid growth of its Starlink satellite internet business are enough to offset Musk’s absolute dominance in corporate governance.

Last year, SpaceX was responsible for over 80% of global rocket launches and is developing the reusable Starship system for Mars missions.

Starlink has over 10,000 satellites in orbit, providing internet access to individuals, airlines, cruise ships, and mobile operators, with annual revenue exceeding $10 billion.

One investor stated: “This is truly unique, with the deepest moat in business. Every year this company launches over 90% of the Western world’s space payloads—like the only undersea cable between the U.S. and Europe, all internet traffic must go through them.”

If Musk achieves a series of share price targets tied to “moonshot-level goals,” his control will solidify further. This system is nearly identical to his potential trillion-dollar Tesla pay package, which requires Tesla to grow its market cap six-fold and sell millions of AI humanoid robots.

According to sources, in January this year, the SpaceX board approved a plan: if the company reaches a $7.5 trillion valuation and establishes a Mars colony of 1 million people, Musk could receive up to 200 million class B shares.

Shares will be granted in batches for every $500 billion increase in SpaceX’s market value. Reuters was first to report on the Mars base-related details.

Sources added, if SpaceX reaches a $6.6 trillion valuation and builds a space data center network capable of 100 terawatts of compute power, Musk can gain up to an additional 60 million super-voting restricted shares. Currently, the world’s largest terrestrial data centers provide only 1–2 gigawatts of computing power.

Another investor said: “These numbers look crazy, but I respect tying personal rewards closely to company performance. We can debate whether he should get so much money, but frankly, as long as he builds these giant companies, I am personally fine with it.”

The S-1 also discloses the company’s recent financials, but a series of transactions among Musk’s empire make the numbers complex.

In March 2025, Musk will merge his social media platform X with AI startup xAI; in February this year the two were merged into SpaceX, together valuing the group at $1.25 trillion.

Last month, another agreement was signed: SpaceX has the right this year to acquire AI code company Cursor at $60 billion; if the deal falls through, Musk must pay $10 billion in break-up fees.

In 2024, SpaceX revenue was $14 billion with a profit of $791 million; last year, revenue rose to $18.7 billion but posted a $4.9 billion loss, mainly due to the integration of xAI—which is investing heavily in two massive “giant” data centers equipped with Nvidia chips in Tennessee.

xAI will lose $6.4 billion in 2025 ($1.6 billion in 2024); Starlink reported an operating profit of $4.4 billion last year ($2 billion in 2024), helping hedge losses.

SpaceX did not respond to an email requesting comment.

To boost its IPO image, Musk has leased xAI’s Memphis supercomputer to AI company Anthropic.

One shareholder commented: “This deal obviously makes short-term financials look better.” He estimates Anthropic may pay SpaceX $5 billion a year, which investors believe will add “halo effect” to the IPO.

Venture capital and institutional investors will see huge returns from this listing, with some investors having waited two decades to cash out—SpaceX nearly went bankrupt in its early years.

The IPO will also bring massive service fees to the investment banks and law firms hired by Musk.

Bank of America, Citi, Goldman Sachs, JPMorgan, and Morgan Stanley are leading more than 20 global banks; sources say Musk’s core ally, Michael Grimes—who will return to Morgan Stanley in February 2025 after leaving the Trump administration—is the central figure on this IPO.

Some are concerned that the biggest IPO in history (possibly surpassing Saudi Aramco’s $29 billion raise and $1.7 trillion valuation in 2019) may overwhelm the market; capital may instead flow to OpenAI or Anthropic—both plan to raise tens of billions this year as well.

But all three companies are expected to be rapidly included in indexes, attracting continuous passive inflows. The Nasdaq 100 Index (tracking over $600 billion in funds) was the first to change its rules: large IPOs only need 15 trading days to be included.

One adviser commented: “It’s impossible for investors not to own it, which is excellent for demand.”

Another adviser added: “Market capacity is ample, institutional investors hold $270 billion in idle funds.”

Investment banks plan to allocate large numbers of shares to retail investors via brokers. Tesla is valued at $1.4 trillion with 30% held by retail investors.

Yuri Khodjamirian, manager of the Nasa ETF (holding about $54 million of SpaceX shares), said: “Musk values retail investors highly and wants them to participate. The unprecedented scale of this IPO demands creating market demand.”

A venture capitalist who has invested in X, xAI, and SpaceX said: While Musk’s political and social views are highly controversial, there will be no shortage of IPO buyers.

He said: “We don’t blindly throw money at him, but to be honest, never betting against Elon has always been the right move.”