Danish pension fund excludes SpaceX citing governance and valuation

Denmark's Akademikerpension has placed SpaceX on its portfolio exclusion list, ahead of the company's expected stock market listing. Reuters reported the move, citing a statement from the pension fund.

Exclusion ahead of the IPO

According to Reuters, the fund announced the decision on Friday. It cited the company's governance structure and what it described as an overvalued stock. SpaceX is preparing an initial public offering.

SpaceX did not immediately respond to a request for comment that Reuters sent to the company by email.

Valuation: hard to justify above $1 trillion

According to Akademikerpension, market indications point to a valuation of at least $1.8 trillion for SpaceX. The fund said it was difficult to justify a market valuation above $1 trillion, and that investors are being asked to accept an unprecedentedly low risk premium for a company with high uncertainty.

Governance: "extremely deficient"

The fund also called SpaceX's governance structure "extremely deficient". It said Elon Musk is expected to control more than 80% of the voting rights while simultaneously serving as chief executive officer, chief technology officer and chair of the board.

"The extreme concentration of power effectively prevents the board from exercising meaningful oversight and makes it impossible to remove Musk against his will," the fund said in its statement.

Why it matters

The decision is one of the first public refusals by a large European institutional investor ahead of SpaceX's listing, and it puts the company's ownership structure at the centre of the debate. Reuters has previously reported that SpaceX's board is stacked with loyalists to Musk's business empire, and that the company unveiled its IPO filing in May.