As SpaceX gears up for its IPO in June, an expert has voiced concerns about potential trading volatility amid the influence of founder and top boss Elon Musk.
University of Florida finance professor Jay Ritter told Forbes that an “Elon Musk effect” could significantly impact SpaceX’s valuation, driving heightened long-term volatility as stocks tied to Musk tend to swing more sharply than the broader market.
Tesla, Inc. (NASDAQ:TSLA) and SpaceX are expected to see divergent and volatile performance, according to Ritter. He noted Tesla faces competitive pressure from Chinese rivals, while SpaceX benefits from investor optimism around its cost-efficient satellite and cargo launch capabilities.
He also warned of “substantial downside potential” if SpaceX goes public at a valuation of $1.5 trillion or more, as Musk would receive shares that bestow more voting power on him than other shareholders.
Ritter warned that …
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