Elon Musk’s real kingdom is SpaceX, not TechnoKing

Elon Musk’s real kingdom is SpaceX, not TechnoKing

Elon Musk already calls himself “TechnoKing” at Tesla, but his true dominion lies at SpaceX , and the scope of his control there is unlike anything seen in modern corporate governance. The company’s IPO filing, made public Wednesday, reveals just how absolute Musk’s authority will be once SpaceX goes public.

After the IPO, Musk will serve as CEO, CTO, and chairman of SpaceX’s board. He will hold more than 50% of the voting power, allowing him to appoint directors at will. In practical terms, he cannot be fired. The company has also placed strict limits on shareholder lawsuits and will operate under a far more lenient regulatory environment in Texas , a state whose corporate laws Musk helped shape when he moved Tesla’s incorporation from Delaware.

SpaceX is blunt with prospective investors: “This will limit or preclude your ability to influence corporate matters and the election of our directors.”

More control than Mark

Over the past two decades, tech founders have increasingly consolidated power when taking companies public. Google, Meta, and others used dual-class shares to retain control. But Musk and SpaceX are pushing the boundaries far beyond that, according to Ann Lipton, a law professor at the University of Colorado.

In a blog published last Friday, Lipton argued that Musk is dismantling the three most powerful levers shareholders typically use to pressure a public company’s top executive.

The first is voting. SpaceX uses a dual-class structure where Musk holds 93.6% of the Class B super-voting shares , shares not available to the public in the offering. Even after what is expected to be the largest IPO in history, Musk will still command more than 50% of the voting power. That makes SpaceX a “controlled company” by stock exchange standards, exempting it from rules requiring independent oversight.

SpaceX states in its filing that regular shareholders holding Class A shares “will not have the same protections afforded to shareholders of companies that are subject to all of the corporate governance requirements of Nasdaq.”

Crucially, Musk’s voting control means he can decide any matter requiring shareholder approval, including mergers and acquisitions. If Musk ever wants to merge SpaceX with Tesla , a scenario many have speculated about , he won’t need to convince SpaceX shareholders.

This voting control is the biggest difference between Musk’s power at SpaceX versus Tesla. At Tesla, Musk holds only about 20% voting control and has had to apply immense pressure in recent years , including threats to leave , to secure more stock. (Tesla eventually obliged last year with a $1 trillion compensation package approved by shareholders.)

A legal shield

The second lever SpaceX is curtailing is the ability to sue. By incorporating in Texas, SpaceX has ensured that shareholders cannot file a “derivative suit” unless they own at least 3% of the company’s shares. At the expected $1.75 trillion valuation, that would require a position worth roughly $52 billion.

Derivative suits occur when shareholders sue a company’s directors on behalf of the company itself , as when a small shareholder sued Tesla’s board over Musk’s $56 billion pay package in 2018.

SpaceX has also included language in its bylaws funneling most lawsuits to either the new Texas Business Court, which only began operating in 2024, or through mandatory arbitration. As Lipton told TechCrunch: “Forget it, that’s it. There isn’t going to be a lawsuit” in most cases.

This wasn’t possible before Musk moved Tesla out of Delaware, she said. Until a few years ago, Delaware was increasingly scrutinizing exactly the kind of controlled company SpaceX has become. “You could have the dual-class shares, and that would give you outsized voting power, but it also meant that you were subject to a greater amount of oversight by the Delaware court system,” Lipton explained.

Vote with your feet

The final lever of shareholder power SpaceX has broken, Lipton argued, is the ability to sell shares and walk away. SpaceX successfully lobbied Nasdaq to loosen rules governing how and when companies are added to the Nasdaq 100 index , a group of large-cap companies billed as “fundamentally sound and innovative.”

That process used to take months. Now SpaceX is expected to be added in a matter of weeks. When companies are added to indexes like the Nasdaq 100 or S&P 500, they become automatic buys for large financial institutions, including 401k providers.

Lipton argues this means SpaceX’s stock price will be buoyed early by that impending inclusion, as traders buy in before institutional investors drive the price higher. “Normally, if you can’t vote, and you can’t sue, you can at least sell and drive down the price, and that hurts. It hurts the controller [of the company], it hurts executives who are paid in stock. But now even that is being manipulated,” she said.

Chan Ahn, a former executive at Goldman Sachs and JPMorgan and current CEO of tokenized private equity company Tessera, broadly agrees that rapid inclusion could drive the price higher. But shareholders can still “vote with their feet” and sell their stock , it just may not have the same impact. “You don’t have to buy, and if you have it, and if you don’t like it, you can sell,” he said.

All the money

On top of this control, Musk stands to make a historically anomalous amount of money from SpaceX going forward. Not only will the IPO likely make him the world’s first trillionaire, he was also granted a compensation package consisting of 1 billion Class B shares.

Those shares don’t vest until Musk makes the company worth $7.5 trillion and accomplishes the “establishment of a permanent human colony on Mars with at least one million inhabitants.” While the Mars colony requirement may seem unobtainable to many, Musk can still extract enormous value from these shares long before SpaceX reaches the red planet.

In the stock award agreement attached to the IPO filing, SpaceX reveals that Musk can vote with these shares even before they vest. He can also pledge them as collateral for loans , a popular move among the ultra-rich to access cash without being taxed on unrealized gains. Musk has often done this with his shares of SpaceX and Tesla.

While borrowing against these Mars colony shares technically requires board approval, Musk controls the board. Ultimately, the decision will be up to him.

These incredibly valuable shares become normal common stock if and when Musk sells them. But there is one notable exception: Musk can place them in trusts to retain their super-voting status. That means the king of SpaceX , who has at least 14 children that we know of , is positioning himself to create dynastic control that could last for generations.