Elon Musk pressed the button to begin trading his SpaceX company on the Nasdaq Stock Exchange to the sound of Elton John’s Rocket Man, becoming the world’s first trillionaire. Shares opened at $150 each and swiftly rose to $160, well above their estimated price. But behind the blaze of publicity lies a less-celebrated consequence: your pension is being drawn inexorably towards SpaceX, whether you like it or not.
Later today, SpaceX is expected to raise $75bn by selling shares to investors in what may be the largest initial public offering in history. According to the prospectus, SpaceX is primarily an AI company, and it contains xAI, which is also a social media company, but it is also nominally a rocket company that plans to build cities on other planets. The document tells two stories: one wildly ambitious, the other insane.
“Elon Musk became the world's first trillionaire as SpaceX went public, and UK pension funds are set to invest automatically.”
Yet the real purpose, as the prospectus makes clear, is to create such a massive presence in the market that your money – your retirement savings, your pension – is drawn towards it automatically. This is because, shortly after SpaceX begins selling shares, it will be included in major stock market indices such as the Nasdaq 100 or the MSCI Global Equity Index. Each index is a basket of companies, weighted by value. If you invest £100 in a passive fund that tracks the Nasdaq 100, about £11 goes into Apple. You almost certainly do invest in such funds, because over the last 30 years passive investing has become the norm for huge swathes of the world’s retirement savings. UK savers have more than £3 trillion invested in passive funds; Americans have around $21 trillion.
If SpaceX achieves its predicted valuation of $1.7 trillion, it will have a significant weight in many indices, and so the money your pension fund manager has placed in index funds will flow towards it – whether you want it to or not. You are already invested in Musk because you almost certainly have some indirect ownership of Tesla through your savings. Now SpaceX will join it.
Many people in Britain are unhappy about this. Two thirds of UK voters polled by Survation in December 2024 – including a majority of Reform voters – believe Musk should not be influential in British politics. You might not drive a Tesla or use X, and you might content yourself that you would never give money to a centibillionaire known for giving straight-armed salutes at political rallies. But you are going to anyway. Even if you are not fussed about Musk’s politics, you might still wonder if this is the best company to invest in.