Treasurer Steiner’s Statement About SpaceX’s Initial Public Offering (IPO)

Oregon State Treasurer Elizabeth Steiner joined institutional investors around the country in voicing her concerns about the upcoming SpaceX IPO.

In a statement Treasurer Steiner said:

America's economy thrives when the rules apply to everyone and public companies are transparent and accountable to their shareholder owners. As one of the largest institutional investors in the nation (with more than $147 billion in assets under management), I am deeply troubled by the fast-entry rule changes some indexes have granted SpaceX's IPO and the transparency-limiting elements of SpaceX's offering.

Indices that have fast-tracked SpaceX's listing could force institutional investors to purchase stocks (through index funds) that have not proven their value or undergone the rigors of market correction. Retail investors who have holdings in index funds, such as families who are saving for higher education through 529 accounts, face similar exposure. We must be able to trust that appropriate measures are in place to protect our investments from unnecessary market volatility and disproportionate risk.

Oregon teachers, firefighters, nurses and other beneficiaries-who entrust their assets to us to invest responsibly-will own SpaceX shares, through Treasury's participation in passive index funds. However, SpaceX's IPO diminishes beneficiaries' voice by limiting management accountability, which can undermine a company's long-term performance and value.

SpaceX is not the first company to appear to reduce shareholder protections through its governance structure and may not be the last large IPO to benefit from the fast-entry rule. To protect shareholders, it's time for companies to end mechanisms that stifle accountability and for indices to ensure transparency and fairness in their listings.