How Elon Musk will increase his power through the SpaceX IPO

Published: 2 weeks ago (May 21, 2026 at 03:35 PM EDT)

7 min read

Source: TechCrunch

Elon Musk’s Dominance at SpaceX

Elon Musk wields extraordinary control over the companies he leads. While he already brands himself “TechnoKing” at Tesla, his grip on SpaceX is even more absolute, giving him unprecedented influence over one of the world’s most valuable firms.

IPO Filing Highlights

The company’s IPO filing was made public on Wednesday, May 20, 2026 – see the full article on TechCrunch:
After the IPO, Musk will retain the titles of CEO, CTO, and Chairman of the Board.
His current 85 % voting power will decline but will remain above 50 %, allowing him to appoint directors at will and making it virtually impossible to remove him.

Shareholder Restrictions

The filing imposes limits on how shareholders can bring legal challenges.
SpaceX will operate under a more permissive regulatory regime in Texas, Musk’s home state, a framework he helped shape when he moved Tesla’s incorporation from Delaware to Texas.

“This will limit or preclude your ability to influence corporate matters and the election of our directors.”
— SpaceX prospectus, post‑IPO filing

The above points summarize the key aspects of Musk’s monarchical control over SpaceX as disclosed in the recent IPO filing.

More Control Than Mark

Tech founders have enjoyed increased control over public companies over the last two decades, especially as Google, Meta (then Facebook), and other tech firms went public with dual‑class shares.

But Elon Musk and SpaceX are taking things much further, according to Ann Lipton, professor of law at the University of Colorado.

Lipton argued, in a blog post published last Friday, that Musk is obliterating the three most powerful levers shareholders can typically pull to pressure a public company’s top executive.

1. Voting Power

Dual‑class structure: SpaceX’s Class B super‑voting shares give Musk 93.6 % of the voting power. These shares will not be offered to the public in the IPO.
Post‑IPO control: Even if SpaceX becomes the largest IPO in history, Musk will retain more than 50 % of the voting power, classifying SpaceX as a controlled company under stock‑exchange rules. Controlled companies may exempt themselves from certain independent‑oversight requirements.
Shareholder protections: SpaceX’s IPO filing states that regular shareholders (who will own 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.”

Because Musk controls the vote, he can unilaterally approve actions that normally require shareholder consent—e.g., mergers and acquisitions. If he ever wishes to merge SpaceX with Tesla (a scenario many have speculated about), he would not need shareholder approval from SpaceX investors.

2. Comparison with Tesla

Voting control: Musk holds roughly 20 % of the voting power at Tesla, far less than his stake in SpaceX.
Shareholder pressure: At Tesla, Musk has faced intense shareholder scrutiny, even threatening to leave the company to force a larger compensation package. Shareholders eventually approved a $1 trillion compensation plan for him.

Key takeaway: Musk’s voting dominance at SpaceX gives him a level of unilateral decision‑making that far exceeds his influence at Tesla, fundamentally reshaping the balance of power between a founder and public shareholders.

A Legal Shield

SpaceX’s second lever for protection is limiting the ability to sue.

Derivative‑suit restrictions

By incorporating in Texas, SpaceX requires shareholders to own at least 3 % of the company’s shares before they can file a derivative suit (a lawsuit brought by shareholders on behalf of the company).
At the projected $1.75 trillion valuation, that threshold translates to roughly $52 billion in stock.

Derivative suits occur when shareholders sue a company’s directors for alleged wrongdoing.
Example: a small shareholder sued Tesla’s board over the $56 billion pay package awarded to Elon Musk in 2018.

Bylaw provisions steering disputes

SpaceX’s bylaws direct most lawsuits to either:
1. The Texas Business Court (which began operating in 2024), or
2. Mandatory arbitration.

“Forget it, that’s it. There isn’t going to be a lawsuit,” — Lipton told TechCrunch.

Why the shift matters

Prior to Musk moving Tesla (and by extension SpaceX) from Delaware to Texas, Delaware courts increasingly scrutinized the type of controlled‑company structure SpaceX now has.
Dual‑class shares grant outsized voting power, but under Delaware law they also invite greater judicial oversight.

“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.

Vote with Your Feet

SpaceX has altered the final lever of shareholder power—the ability to sell shares and walk away—according to Lip‑to‑n.

Why It Matters

Nasdaq 100 inclusion: SpaceX successfully lobbied Nasdaq to speed up the process for adding companies to the Nasdaq 100 index (a basket of large‑cap, “fundamentally sound and innovative” firms).
Timeline: What once took months can now happen in weeks.
Institutional buying: Once a company is added to the Nasdaq 100 or S&P 500, large financial institutions (e.g., 401(k) providers) must automatically buy the stock.

Expected Effect on the Stock

“Normally, if you can’t vote, and you can’t sue, you can at least sell and drive down the price, and that hurts,” Lip‑to‑n said.
“It hurts the controller [of the company], it hurts executives who are paid in stock. But now even that is being manipulated.”

Because of the impending index inclusion, Lip‑to‑n argues that SpaceX’s price will be buoyed in the early days of public trading—traders will buy before institutional investors flood in and push the price even higher.

Counterpoint

Chan Ahn, former executive at Goldman Sachs and JPMorgan and current CEO of tokenized‑private‑equity firm Tessera, agrees that rapid Nasdaq 100 inclusion could lift the price, but he adds:

“Shareholders will still be able to ‘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.’”

Key Takeaway:
While index inclusion can amplify buying pressure and lift a newly public stock, the traditional “vote with your feet” mechanism—selling shares—remains, albeit with potentially reduced influence on price dynamics.

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 granted a compensation package consisting of 1 billion Class B shares.

Those shares don’t vest until:

SpaceX is valued at $7.5 trillion, and
The company accomplishes the “establishment of a permanent human colony on Mars with at least one million inhabitants.”

While the “Mars colony” requirement may make the package seem unobtainable to many, Musk can still extract a ton of value from these shares long before SpaceX ever reaches the red planet.

How Musk Can Leverage the Shares Now

Voting rights: In the stock‑award agreement attached to the IPO filing, SpaceX reveals that Musk can vote with these shares even before they vest.
Collateral for loans: He can pledge the shares as collateral, a common strategy among the ultra‑rich to obtain cash without being taxed on unrealized gains. Musk has used this approach before with his SpaceX and Tesla holdings.
Board approval: Borrowing against the Mars‑colony shares technically requires board approval, but Musk controls the board, so the decision ultimately rests with him.

If Musk ever sells the shares, they become normal common stock. However, there is one notable exception:

Trust placement: Musk can place the shares in trusts while retaining their super‑voting status. This opens the possibility of creating dynastic control for his family (he has at least 14 known children).

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