AkademikerPension, the Danish pension fund for the country’s academics, announced in a statement that it is excluding SpaceX from its investible universe—banning the fund and its external asset managers from investing in the company—citing concerns about the aerospace giant’s valuation and share-class structure.
SpaceX—Space Exploration Technologies Corp.—filed its initial public offering prospectus last week and is reportedly targeting a $1.8 trillion valuation, already a haircut from the hoped-for $2 trillion valuation. SpaceX aims to raise approximately $75 billion in its public offering.
In a statement, AkademikerPension CIO Anders Schelde said SpaceX does not make sense as an investment for a long-term institutional investor.
“We find it extremely difficult to justify a market valuation above $1 trillion,” Schelde said in a statement. “When valuations of up to $1.8 trillion are being discussed, we believe the stock is at least 80 percent overvalued for long-term investors like us.”
Evaluating a ‘Highly Uncertain Company’
According to Schelde’s statement, investors are being asked to accept an “unprecedentedly low risk premium for a highly uncertain company, where pricing appears to be driven more by [Founder] Elon Musk’s narratives than by economic realities.”
The IPO is expected to create a windfall for the company’s early backers and employees; a 2019 funding round valued SpaceX at $33.9 billion. Some of the company’s large backers include venture capital firms Founders Fund, Andreessen Horowitz and Sequoia Capital; asset managers Fidelity, Baillie Gifford and T. Rowe Price; corporate investor Alphabet; and institutional investors the Ontario Teachers’ Pension Plan, the endowment of Washington University in St. Louis, and Humain, an affiliate of the Public Investment Fund of Saudi Arabia.
AkademikerPension stated it will aim to prioritize the long-term protection of its members’ retirement savings, despite current market hype that could drive the stock price higher in the long-term. SpaceX is expected to go public on June 12.
AkademikerPension, which manages $25 billion in assets, previously added Tesla—also run by Musk—to its exclusion list in 2025, citing the company’s clashes with labor unions in Europe. Earlier this year, the fund fully divested from its holdings of U.S. Treasurys, citing concerns about U.S. public finances.
Governance Issues
AkademikerPension also took aim at the SpaceX’s share ownership structure, which would give Musk voting control of the company through its dual-share-class structure.
According to SpaceX’s prospectus, Musk will own 12.3% of the company’s Class A shares, which have one vote per share, and 93.6% of the company’s Class B shares, which grant 10 votes per share. Combined, Musk would own 6.418 billion Class A and B shares combined for a combined 85.1% of the company’s voting power.
“If this were solely about responsible investment, SpaceX would have been excluded in the blink of an eye because of its catastrophic governance structure,” said Schelde, stating that the concentration of power in Musk’s hands would prevent the SpaceX board from exercising meaningful oversight over the company.
The California Public Employees’ Retirement System, the New York State Common Retirement Fund and the New York City Comptroller’s office all criticized the proposed governance structure in a joint letter to SpaceX executives.
“Public investors are being asked to fund a company with the most management-favorable and extreme governance structure ever brought to the U.S. markets at this scale,” New York State Comptroller Thomas DiNapoli said in a statement. “Millions of working people whose retirement savings will be forced into SpaceX through index funds deserve baseline protections, not a structure engineered to strip them away. We renew our request for a meeting with SpaceX management.”
Schelde stood behind his fund’s decision to avoid the company.
“We cannot rule out that the stock may create short-term noise in our returns relative to the market and some of our industry peers,” he said in the statement. “But that is a risk we are perfectly willing to accept. We are long-term investors.”
Tags: AkademikerPension, SpaceX