Denmark’s AkademikerPension has placed SpaceX on its exclusion list, ahead of the company’s debut on the Nasdaq.

The pension fund explained that its decision is based on its assessment that SpaceX’s market value has become inflated and due to serious concerns regarding the company’s management.

AkademikerPension chief investment officer, Anders Schelde, explained: “After some discussion, we have taken the formal decision to place SpaceX on our exclusion list.”

Currently, market indications suggest a valuation of at least USD 1.8trn for the company.

However, under the pension fund’s estimation, even under optimistic assumptions, the company’s value cannot be pushed above USD 1,000bn.

“We find it very difficult to calculate a market value of over USD 1,000bn. Given that valuations are now being discussed as high as USD 1.8trn, we believe the share is at least 80 per cent overvalued for long-term investors,” Schelde stated.

The pension fund argued that investors are being asked to accept an unprecedentedly low risk premium for an uncertain company, where pricing appears largely to be a matter of “pure fantasy” based on SpaceX CEO Elon Musk’s narratives rather than economic realities.

In addition to this, AkademikerPension said its decision concerns responsible investment, notably, governance, which it described as “extremely deficient”. Musk is expected to control over 80 per cent of the votes and combines the roles of CEO, CTO and chairman of the board.

“If it were solely a matter of accountability, SpaceX would have been excluded in a heartbeat due to the company’s disastrous governance,” Schelde stated.

This, he warned, means that SpaceX’s board cannot exercise effective control and Musk cannot be removed against his will, which the pension fund argued “significantly weakens the rights of minority shareholders and increases the risk of conflicts of interest”.

“In our view, Tesla (also headed by Musk) has by far the worst governance among the largest listed companies, and SpaceX is even worse,” Schelde added.

Overall, Schelde said the decision is about responsibility and expected long-term returns.

“For us, it is crucial to protect members’ pensions in the long term. We cannot rule out that, in the short term, the share will cause volatility in our returns compared to the market and some of our competitors. But that is a risk we are happy to live with. We are long-term investors,” he concluded.

The exclusion means that neither AkademikerPension nor its external managers may purchase shares in SpaceX.

European Pensions has contacted SpaceX for a response.

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