Jeffrey analyst says SpaceX's governance controversy is "too simplistic," warning that rigid standards may miss long-term gains.

Aniket Shah, Global Head of Sustainability and Transformation Strategy at Jefferies Group, stated on the 2nd that it is overly simplistic for some investors to blacklist Space Exploration Technologies Corp. solely due to corporate governance issues, lacking data support, and it could result in investors missing out on long-term financial gains. In a media interview, Shah pointed out a current trend in the market to absolutize good governance models, which he believes is too rigid. He emphasized that existing data does not clearly demonstrate that separating the roles of Chairperson and CEO always leads to better performance. Investors applying such standards mechanically may make poor investment decisions. Recently, institutional investors from multiple locations, from New York to Copenhagen, expressed strong concerns about SpaceX's governance structure. Critics noted that SpaceX founder Elon Musk holds over 80% of the company's voting rights and serves as CEO, Chief Technology Officer, and Chairperson, a control structure described by some pension funds as disastrous, leading them to blacklist the company. New York City's Comptroller Mark Levine previously stated that Musk's control over SpaceX represents a new level of disregard for the rights of common shareholders. Regarding the fluctuations in SpaceX's stock price since its IPO, Shah deemed it quite far-fetched to attribute these to corporate governance issues. He indicated that the recent performance of SpaceX's stock more accurately reflects the market's overall reassessment of the artificial intelligence sector, rather than being directly linked to governance matters. Shah further noted that rigid governance standards have historically caused many investors to miss out on significant wealth opportunities. He cited Meta Platforms and Tesla as examples, both of which were controversial at the time of their IPOs due to their dual-class share structures and high concentration of power among their founders, yet since going public, their stock prices have increased by over 1300% and approximately 27,000%, respectively. He believes the current ESG investment field should learn from these lessons and avoid viewing complex corporate governance issues through a checklist approach.