Space Exploration Technologies Corp (SpaceX) is considering a dual-class share structure in its planned initial public offering (IPO) this year, mirroring a strategy its billionaire founder Elon Musk floated for Tesla Inc, people familiar with the matter said.
A two-tier structure would give select shareholders stock with extra voting power that would allow them to dominate decision making. The move would allow insiders such as Musk to maintain control of the company even with a minority stake.
The US rocket and satellite maker is also in the process of adding members to its board of directors, to help steer the initial public offering and drive Musk’s space ambitions beyond its core rocket and satellite business, the people said.
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SpaceX is seeking to hold an IPO later this year, in a deal that could raise as much as US$50 billion to fund artificial intelligence (AI) data centers in space and a factory on the moon. SpaceX recently acquired Musk’s xAI, moving the company beyond its core businesses into AI.
Deliberations are ongoing and details of the IPO could change, the people said, asking not to be identified as the information is not public.
Dual-class shares are common among US technology firms including Meta Platforms Inc and Google parent Alphabet Inc, and tend to be pitched as a way to enable founders to focus on a longer-term vision. The structure typically gives founders and insiders 10 or even 20 votes for each of their shares compared with only one vote for ordinary shares, which critics say makes them less accountable.
Under a dual-class structure that gives Musk super-voting shares, the billionaire would establish a bulwark against activist shareholders exerting changes at the company against his wishes.
Musk has praised the tiered structure and proposed the creation of a dual class of Tesla shares to have at least 25 percent voting control in the company, threatening to build his AI and robotics products elsewhere if he cannot achieve that level of influence.
“That’s not so much that I could control the company, even if I go bonkers,” he said in 2024.
Although he currently has about 11 percent of the shares, his new US$1 trillion compensation package could expand his stake to 25 percent or more over the next decade.
SpaceX has discussed the feasibility of a tie-up between SpaceX and Tesla, an idea that some investors are pushing.
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