I highlighted one of the significant governance concerns about SpaceX in today’s lead blog, and there are plenty more where that came from.  Since that’s the case, it’s not surprising to see that The CII & a group of mostly public-sector investors have submitted their customary objections to the governance practices of the latest hot dual class IPO.

Those objections notwithstanding, we’ve also come to expect that most institutional investors will stick to their strategy of “buy now, whine later” when it comes to hot issues.  In the case of SpaceX, the WSJ reported yesterday that BlackRock lobbed in a $5 billion order, and that other big investors were likely to follow suit, so it appears that there aren’t going to be many major institutions growing a spine this time around either.

I’m also eagerly awaiting the inevitable next stage – complaints that regulators or stock exchanges need to ride to the rescue of institutional investors, who despite sitting on the world’s largest pile of money, say they’re incapable of doing anything about offerings whose governance provisions they find objectionable.

I guess I’m somewhat sympathetic to the index funds that will be forced to buy SpaceX shortly after the IPO, although because most buy based on float-adjusted market cap, even this humungous offering isn’t going to result in any index fund holding enormous quantities of SpaceX stock, at least at first.

As for the rest of you guys, if you don’t like Elon or SpaceX’s governance, either don’t buy the stock or buy it and plan on playing the long game. After all, there’s evidence that investors can sometimes wear these dual class founders down.  Don’t think that will work with SpaceX? Then see option 1.

– John Jenkins