Senator Elizabeth Warren, the ranking member of the Senate Banking Committee, has sent a letter to the Securities and Exchange Commission (SEC) demanding that the pending SpaceX IPO be halted or delayed due to “the multitude of concerns” regarding governance and disclosures that, in her opinion, put investors at risk.
Senator Warren has long feuded with SpaceX founder Elon Musk. She has criticized the entrepreneur on multiple fronts, including taxes, regulations, and his influence and participation with the government.
Musk, who is the single largest US taxpayer of all time, has labeled Senator Warren – Senator Karen. Several years ago, Musk commented on Warren’s fury: “You remind me of when I was a kid, and my friend’s angry Mom would just randomly yell at everyone for no reason.”
Warren’s style during Senate Committee hearings is typically confrontational, which works well for video sound bites.
In the letter, addressed to SEC Chairman Paul Atkins, the Senator demands the SEC respond immediately to her queries regarding SpaceX’s valuation, disclosures, accounting practices, and corporate structure. The diatribe is effectively a scorched-earth approach that should please her base while irritating the SEC, Musk, and many capital markets participants.
Warren declares:
“In short, there are a multitude of unanswered material questions investors and the public have about SpaceX and what it is likely to do with the billions it seeks to raise. The SEC should not accelerate the effectiveness of SpaceX’s registration without serious scrutiny of SpaceX’s financial statements, governance structure, and the impact it may have on retail investors, including through index funds.”
She requests a “cooling off period” to better evaluate the soundness of SpaceX investments while criticizing Musk’s “contradictory statements.”
While the SEC must approve the S-1 filing for the public offering to go forward, the agency is not in the business of providing financial advice to investors. Individuals and institutions must assess the document and make their own determination as to whether a SpaceX investment makes sense for them.
In effect, the Warrent missive is probably best viewed as a continuation of the Musk-Warrent feud stemming from disparate political ideologies. Warren, one of the most left-wing members of Congress, is a vocal progressive who does not like the private sector. Musk may be viewed as the most successful innovator of a generation.
As for the SEC, it will most likely file the letter from the Senator with all of the others.
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