Warren Statement on SpaceX IPO

Warren Statement on SpaceX IPO

Washington, D.C. - United States Senator Elizabeth Warren (D-Mass.), Ranking Member of the Senate Banking, Housing, and Urban Affairs Committee, released the following statement ahead of SpaceX's IPO:

"Trump's SEC greenlit an IPO with numbers analysts have called 'nonsensical.' The world will get its first trillionaire while Americans across the country are scraping together every dollar to save for retirement. Rather than changing the rules to rush SpaceX into Americans' retirement portfolios, index providers should ensure they do their part to protect American families' investments. And the SEC should do its job and ensure Elon Musk does not rip off investors."

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Senator Warren previously wrote to the SEC asking them to delay the IPO, detailing her serious concerns about the risk from the IPO:

• About the company's valuation: "(M)arket analysts have raised concerns about the math underlying SpaceX's target valuation, calling it 'nonsensical,' 'smoke-and-mirrors accounting,' and 'truly out of this world.'"
• About governance structure and investor protections: "Publicly traded companies are meant to be accountable to their shareholders. The SpaceX IPO will flip this model on its head, with shareholders providing billions of dollars in new capital with no accountability measures for Mr. Musk or company leadership, as the company '(combines) supervoting shares, mandatory arbitration, stricter rules on shareholder proposals and Texas corporate law to give control to SpaceX CEO Elon Musk and other insiders.'"
• About passive investors: "the SpaceX IPO creates a new concern: that major stock market indexes are being rigged in a way that would force millions of investors in passive index funds - a generally lower cost investment option that can be attractive to retail investors - to invest in SpaceX and face exposure to SpaceX's significant risks with no choice in the matter."

Senator Warren also wrote to the index providers on their rule changes that could rapidly add SpaceX to major stock indexes while waiving investor protections.

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