The War of Capital -- The American Prospect

[erronis]

https://prospect.org/2026/06/26/war-of-capital-spacex-ipo/
Zachary Groz

Asset managers, private investment firms, and institutional investors like pension funds have divergent interests, though as the SpaceX IPO reveals, the money power acts in concert.

As startups, they were financed by federal grants and bailed out with federal loans. As fledgling private companies, they soaked up state and local tax credits and cash subsidies to become dominant market actors. After capturing huge swaths of the market, pumping money into elections, and lobbying concessions out of lawmakers and agencies, they reinvented themselves as the federal government's contractors of choice. Now, as the Prospect has been reporting the past month, Elon Musk's $2 trillion bundle of tech companies has been backstopped again by the taxpayer, this time on the shoulders of millions of passive investors and pensioners with no choice other than to own a piece of SpaceX.

The company's initial public offering (IPO), which is now the biggest in history, has managed to spook almost everyone orbiting around it. Sen. Elizabeth Warren (D-MA) has warned it "may threaten the integrity and stability of our capital markets" and cements the "most rigged corporate structure in history."

The Council of Institutional Investors (CII), a trade group representing dozens of retirement funds, endowments, and money managers, seems to agree with that assessment. The group has balked at SpaceX's two-class shareholder voting structure, which leaves Musk in total control of corporate board appointments, and at the offering's fairly overt suggestion that the board expects huge conflicts of interest to arise in the future, which it doesn't intend to police. CII also has highlighted a provision requiring shareholders to take practically all disputes to a single, newly created specialty court in Texas, where Musk can expect a huge home-field advantage. Texas Gov. Greg Abbott (R), a key Musk ally, handpicks its judges, who, subject to approval by the state legislature, serve two-year terms and can be reappointed in perpetuity.

Taken together, the structure of the offering may pave the way soon enough for a merger of SpaceX and Tesla, which at least one Musk acolyte is saying could birth the first $100 trillion company. (Combined today, the new entity's market cap would miss that mark by about $96 trillion, though it would still approach Nvidia, Apple, and Google parent Alphabet as the highest-valued company in the world.)

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