SpaceX says it may issue ‘significant’ equity in ‘future transactions’

Musk has mused about combining his companies for many years, and the SpaceX IPO is only heating up the chatter that he will finally bring his two biggest entities together. A merger of this size would face a number of legal and potential regulatory challenges, and would likely have to pass a shareholder vote at Tesla. But, as the IPO filing showed, Musk has supreme voting power at SpaceX; the only person who could vote down a merger on that side of the term sheet would be Musk.

Musk’s voting power at SpaceX would not be at risk during a major dilution event. SpaceX has three primary classes of shares heading into this IPO. They all have the same basic economic rights, but different voting rights.

The Class A shares are what will be sold to the public and come with one vote per share. The Class B shares are owned exclusively by Musk and have 10 votes per share. SpaceX also has Class C common stock, which comes with no voting rights at all. While those Class C shares are currently used for executive compensation, Musk could use those shares to buy other companies without diluting his power. (SpaceX also has Class D shares set aside, which have reduced economic rights; the company has not yet decided on whether those shares will have any voting power.)