Elon Musk's SpaceX Shares Decline, But He Maintains Control

Elon Musk's ownership stake in SpaceX has declined in recent years, but the company's filings show that he still has control over the rocket company he founded two decades ago.

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A trust associated with Mr. Musk owns a significant stake in SpaceX, according to a document the company filed last week with the Federal Communications Commission. The trust had held a 54% stake in the company as of November 2016, a filing from then shows. This latest filing indicates that the trust now owns 42% of SpaceX.

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According to a recent FCC filing, Mr. Musk's trust controls 78% of the voting rights at SpaceX, a proportion that has been steady since November 2016, according to other documents the company has filed with the telecom regulator. Founders often see their ownership stakes in their companies decline over time as they maintain control over voting rights, according to academics who study venture investing and private companies. This is not an uncommon occurrence.
Mr. Musk did not respond to a request for comment. A spokesman for Space Exploration Technologies Corp., based in Hawthorne, California, also did not respond to a request for comment.

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Mr. Musk's financial situation has gained increased attention due to his purchase of Twitter Inc. in a deal valued at $44 billion. Mr. Musk has said that he has been cutting costs at Twitter in order to turn the company around, as it has been losing money. SpaceX was founded in 2002 by Elon Musk, who also leads Tesla Inc. and is involved in startups. He used capital he gained after what is now PayPal Holdings Inc. was sold to finance the company.

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SpaceX has grown significantly since it was founded, building a fleet of rockets that government and commercial customers can hire for launches. The company's Starlink service has also been very successful, with more than 1 million active subscribers.
SpaceX is a rapidly growing company with over 9,500 employees. They are always looking for talented individuals to join their team, and currently have over 1,000 open positions on their careers website.

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In a recent tweet, Mr. Musk said that he continues to oversee SpaceX and Tesla, but that teams at both companies are so good they often don’t need his input.
Some Tesla investors have expressed frustration with Mr. Musk’s focus on Twitter. The top official at the National Aeronautics and Space Administration (NASA) said he asked Gwynne Shotwell, SpaceX’s president, if Twitter would distract from the company’s mission. Ms. Shotwell said it wouldn’t.

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Mr. Musk may own a smaller stake in SpaceX than he used to, but he still has a lot of control over the company's future thanks to his voting rights, according to Angela Lee, a professor of professional practice at Columbia Business School and a startup investor.
"He will be responsible for setting the company's direction," she said.

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SpaceX is a closely held company, which means that it does not disclose financial results or provide details about operations in securities filings the way companies with shares that trade publicly do. Ownership information is also more limited. SpaceX has been raising money from outside investors for several years, according to earlier statements from the company, investor disclosures, data trackers, and corporate filings.
SpaceX has around 150 investors, according to a list from PitchBook. Some of these investors have purchased shares from other investors, according to PitchBook's data.

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Elizabeth Pollman, a law professor at the University of Pennsylvania who has studied corporate governance and venture capital, said that founders would see their economic interest in the companies they created diluted if outside investors receive shares, unless those founders were also receiving a proportional amount of additional company stock.

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"The percentage of ownership held by a company's founder typically decreases over time, as successive rounds of financing are completed," she said.
In 2015, SpaceX said it raised a total of $1 billion from Google and Fidelity Investments. This funding round valued the company at about $125 billion.
As of December 2021, Google owned 6.99% of SpaceX shares, according to a corporate filing that SpaceX made in Alaska that month. Another investor, Founders Fund, owned 5.76% of the company as of a year ago, the same filing shows.

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Fidelity's ownership stake in SpaceX is not listed in the Alaska document, which requires companies to disclose any owners holding 5% or more of the company's issued shares. However, several investment funds offered by Fidelity have exposure to SpaceX, according to reports from the asset manager.
Google representatives did not respond to requests for comment. Founders Fund and Fidelity also declined to comment.

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According to former employees, SpaceX employees and ex-staffers have the opportunity to sell shares they gained as part of their compensation packages periodically. The company recently began another marketing effort, seeking to let employees and ex-staffers sell shares at a price of $77 each.