WASHINGTON (dpa-AFX) - Senator Elizabeth Warren has reached out to the U.S. Securities and Exchange Commission (SEC), urging them to hold off on SpaceX's upcoming initial public offering (IPO).
She raised concerns about the company's valuation, corporate governance, and the protections available for investors. In a lengthy 12-page letter to the SEC, Warren pointed out that the planned IPO poses significant risks to market integrity and retail investors because of its scale and distinctive structure.
The Massachusetts Democrat expressed skepticism about SpaceX's valuation, especially after its purchase of xAI, and warned about possible conflicts of interest due to CEO Elon Musk's controlling stake in the company.
Additionally, she highlighted that the IPO could quickly make its way into major stock indexes, which would force passive index fund investors to hold SpaceX shares, even if they didn't intend to.
SpaceX is set to begin trading on Friday, with an IPO price of $135 per share, potentially making it the largest public offering ever. The company plans to allocate around 30% of its shares to retail investors, which would amount to roughly $22.5 billion of the overall offering.
Warren has urged SEC Chairman Paul Atkins to conduct a comprehensive regulatory review before the registration statement goes into effect. At the time of her letter, neither SpaceX nor the SEC had publicly addressed her concerns.
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