Elon Musk’s SpaceX Stake Moves Lower, But Executive Retains Control

Mr. Musk’s trust also controlled 78% of the voting rights at SpaceX, according to a recent FCC filing, a proportion that has been steady since November 2016, according to other documents the company filed with the telecom regulator.

It isn’t uncommon for founders to see their ownership stakes in the companies they create fall over time as they keep control over voting rights, according to academics who study venture investing and private companies.

Mr. Musk didn’t respond to a request for comment. A spokesman for Hawthorne, Calif.-based Space Exploration Technologies Corp., the formal name for the company, also didn’t respond to a request for comment.

Mr. Musk’s financial situation has gained increased attention because of his purchase of Twitter Inc. in a deal valued at $44 billion. Mr. Musk has said he has been slashing costs there to turn around the social-media company, which has been losing money.

The SpaceX executive, who also leads

Tesla Inc.

and is involved in startups, founded SpaceX in 2002, using capital he gained after what is now

PayPal Holdings Inc.

was sold.

SpaceX has grown since then, building a fleet of rockets that government and commercial customers hire for launches as well as Starlink, which the company said in a tweet this month had surpassed more than 1 million active subscribers.

In a court filing from early last year, the company’s lawyers said it had more than 9,500 employees; SpaceX advertised around 1,000 open positions on its careers website as of this month.

Mr. Musk recently said in a tweet that he continues to oversee SpaceX and Tesla, but he said that teams at both companies are so good they often don’t need his input. 

Some Tesla investors have expressed frustration with Mr. Musk’s focus on Twitter. The top official at the National Aeronautics and Space Administration said he asked

Gwynne Shotwell,

SpaceX’s president, if Twitter would distract from the company’s mission. Ms. Shotwell said it wouldn’t. 

Though his ownership stake has trended lower, Mr. Musk retains significant control over SpaceX’s strategic decision making and future, in part given his voting rights, said Angela Lee, a professor of professional practice at Columbia Business School and a startup investor.

“He is going to set the direction of the company,” she said.

As a closely held company, SpaceX doesn’t disclose financial results or provide details about operations in securities filings the way companies with shares that trade publicly do. Ownership information is also more limited. 

Earlier statements from SpaceX, investor disclosures, data trackers and corporate filings show that outside investors have acquired shares in the company as it stepped up its fundraising efforts in recent years. 

SpaceX has around 150 investors, according to a list from PitchBook, which tracks venture capital and other deals. Some of those investors purchased shares from other investors, PitchBook’s data shows. 

Elizabeth Pollman, a law professor at the University of Pennsylvania who has studied corporate governance and venture capital, said founders would see their economic interest in the companies they created diluted as outside investors receive shares, unless those founders were also receiving a proportional amount of additional company stock. 

“The percentage of ownership of the founder would typically go down over time, after successive rounds of financing,” she said. 

In 2015, SpaceX said it raised a total of $1 billion from Google and Fidelity Investments, which took just under 10% of the company between them at the time. SpaceX also raised funds earlier this year, valuing the company at about $125 billion. 

Google, part of

Alphabet Inc.,

owned 6.99% of SpaceX shares as of December 2021, according to a corporate filing that SpaceX made in Alaska that month. Another investor, Founders Fund, owned 5.76% of the company as of a year ago, the same filing shows. 

Fidelity’s stake isn’t listed in the Alaska document, which says companies filing it must disclose owners holding 5% or more of issued shares. Several funds offered by the asset manager say they have exposure to SpaceX, according to reports from them.

Representatives from Google didn’t respond to requests for comment. Founders Fund and Fidelity declined to comment. 

Current and former SpaceX employees also have the opportunity to periodically sell shares they gained as part of their compensation packages, former employees have said. The company recently began another marketing effort, seeking to let employees and ex-staffers sell shares at a price of $77 each.

Write to Micah Maidenberg at micah.maidenberg@wsj.com