A Jefferies analyst is pushing back hard against institutional investors who have blacklisted SpaceX over governance concerns, calling their objections overly simplistic and potentially costly. Aniket Shah, the Wall Street bank’s global head of sustainability and transition strategy, said investors who refuse to hold the stock based on traditional governance checklists are missing the bigger picture and could be cheating themselves out of significant long-term returns. The idea that there is a single acceptable form of good corporate governance, he argued, is a notion he highly questions, adding that people who try to force governance into some kind of straitjacket are being too simple-minded.
The criticism from Shah follows months of hand-wringing from pension funds and institutional investors stretching from New York to Copenhagen over Elon Musk’s unprecedented grip on SpaceX. Musk holds more than 80 percent of voting rights while simultaneously serving as chief executive, chief technical officer, and chairman — an arrangement one pension fund labeled catastrophic and others have cited as grounds enough to avoid the stock entirely. New York City Comptroller Mark Levine said before the company’s June 12 initial public offering that Musk’s control represents a new level of disregard for shareholder rights, and Nell Minow of ValueEdge Advisors warned that the setup all but eliminates shareholders’ ability to bring lawsuits over fiduciary failures or access company books and records.
Shah contends that much of this criticism rests on shaky empirical ground. He pointed out that there is no clear evidence separating the chairman and CEO roles reliably leads to better company performance, noting that Norway’s massive sovereign wealth fund and other advocates of independent chairs are pushing a principle that does not necessarily translate into stronger returns. Anyone adhering rigidly to that checklist approach, he said, would have sat out Facebook’s 2012 public debut and Tesla’s 2010 listing — decisions that would have meant missing gains of roughly 1,300 percent at Meta and a staggering 27,000 percent at Tesla. Having overly prescriptive ways of looking at the world, where dual-class share structures are automatically deemed bad and shareholder concentration is always treated as a red flag, can lead directly to poor investment choices, Shah warned.
Since its IPO briefly made Musk the world’s first trillionaire, SpaceX shares have dropped about 20 percent amid a broader technology selloff that has pushed the Nasdaq 100 Index into correction territory. Some critics have pointed to that decline as vindication of their governance warnings, but Shah dismissed any connection between the two. He attributed the pullback instead to investors rethinking their positions on artificial intelligence broadly rather than anything specific to how SpaceX is run, saying it would be quite a stretch to link recent share-price weakness to long-standing concerns about board structure or voting control.
