Sen. Elizabeth Warren (D-Mass.) asked the Securities and Exchange Commission for a delay. space xIn a letter shared with CNBC, it cited concerns about the rocket maker’s valuation and corporate governance.
“Given the unprecedented threat to investor protection and market integrity posed by the largest IPO in history, the final acceleration of the registration statement’s effectiveness must be delayed accordingly,” Warren wrote to market regulators on Tuesday.
In a 12-page letter, Warren warned of potential “inaccurate or misleading accounting and valuations” surrounding SpaceX’s acquisition of Elon Musk’s xAI, conflicts of interest surrounding Musk’s “uniquely unchecked” power as a major shareholder, and that the company’s jump into major stock indexes could pose “significant risks” to both active and passive investors.
Warren’s letter comes as SpaceX is scheduled to make its market debut on Friday and aims to raise a record amount at a historic valuation.
“For investors who are selective about their investments, at least they can avoid investing in companies that engage in risky or unfair practices,” Warren wrote. “However, SpaceX’s IPO raises a new concern: that major stock market indexes are being manipulated in a way that forces millions of investors in passive index funds, a generally low-cost investment option that is attractive to individual investors, to invest in SpaceX and expose them to SpaceX’s significant risks without choice.”
SpaceX took the unusual step of setting a take-it-or-leave-it price of $135 per share, instead of offering a price range that fluctuates based on demand, as is customary for IPOs. The company is also reportedly targeting a higher-than-usual 30% allocation to retail investors for a total of about $22.5 billion for its historic debut.
CNBC has reached out to SpaceX and SEC Chairman Paul Atkins for comment.
