Danish Pension Fund Drops SpaceX Over Concerns on Governance and Valuation
Akademikerpension's Decision and Rationale
SpaceX Exclusion from Portfolio
COPENHAGEN, May 29 (Reuters) - Danish pension fund Akademikerpension said on Friday it had placed SpaceX on its portfolio exclusion list ahead of the company's initial public offering, citing concerns about the governance structure and what it said was an overvalued stock.
Concerns Over SpaceX Valuation
Market Valuation Estimates
• Market indications point to a valuation of at least $1.8 trillion for SpaceX, Akademikerpension said in a statement, adding that it was difficult to justify a market valuation above $1 trillion.
Risk Premium Issues
• Investors are asked to accept an unprecedentedly low risk premium for a highly uncertain company, the pension fund said.
Governance Structure Criticisms
SpaceX's Response
• SpaceX did not immediately respond to a request for comment when contacted by Reuters via email.
Deficiencies in Governance
• Akademikerpension also said the governance structure of SpaceX was "extremely deficient", adding that 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.
Concentration of Power
• "The extreme concentration of power effectively prevents the board from exercising meaningful oversight and makes it impossible to remove Musk against his will," Akademikerpension said.
(Reporting by Louise Rasmussen, editing by Terje Solsvik)
