Behind SpaceX’s extraordinary valuation lies a question investors may prefer to ignore: can the company preserve its momentum without its dominant founder?
Ahead of SpaceX’s June initial public offering, the company described Elon Musk as “the driving force behind its growth, innovation, and operational success.” The documents also stated explicitly that his death, disability, or any other loss of ability to run the business could seriously disrupt its management structure.
As mentioned by CNN
Such warnings are common in regulatory filings. In SpaceX’s case, however, they point to a fundamental risk: the company is simultaneously working on rockets, satellites, robots, and artificial intelligence systems, yet remains heavily dependent on one person and his vision of the future.
There is only one Elon Musk, and it is impossible to create another person exactly like him. That is both an advantage and a disadvantage, because investors who buy shares in his companies are betting on Musk no less than they are on the businesses themselves.
– Dan Ives
In corporate governance, this kind of dependence is known as key-person risk. It is not a new issue for Musk’s companies: some Tesla shareholders have already challenged his compensation, arguing that the company is overly dependent on him.
The problem extends far beyond major investors. Its consequences could be felt by millions of retirement-account holders whose savings are invested in index funds.
How Dependence on Elon Musk Affects SpaceX’s Valuation
Tesla is valued at approximately $1 trillion. The company is included in the Nasdaq 100 and the broad S&P 500 stock index. Following SpaceX’s record-breaking June initial public offering, its valuation approached $2 trillion, and the company could join the S&P 500 as early as mid-2027.
The combined market value of SpaceX and Tesla is about $3 trillion. Some of that valuation is attributed to what is known as the “Musk premium” – the premium investors are willing to pay for his ambitious, though still largely theoretical, plans.
These include orbital data centers, the colonization of Mars, and the creation of millions of humanoid robots. If Musk were suddenly unable to run the businesses, a significant portion of that trillion-dollar valuation could disappear.
Tim Quigley, a professor of strategic leadership and corporate governance at the International Institute for Management Development, believes the stock market is probably underestimating the scale of the threat.
It would have far-reaching consequences, because many people believe that his entire empire is essentially just him.
– Tim Quigley
Ross Gerber, co-founder of the investment firm Gerber Kawasaki, called Musk himself the greatest risk to SpaceX. In his estimation, roughly $1 trillion of the company’s value could be directly tied to its leader. SpaceX and Tesla did not comment on the matter.
Musk controls 48% of SpaceX through a combination of publicly available Class A shares and Class B shares with additional voting rights reserved for insiders. Since he owns the overwhelming majority of the Class B shares, he effectively controls the board of directors. He can be removed only by his own decision.
SpaceX’s filings contain no formal succession plan. The company also stated that it does not have key-person life insurance and is uncertain whether it could replace Musk. Finding an executive with a comparable combination of skills, experience, and influence could prove lengthy and unpredictable.
What SpaceX Can Learn from Apple
Corporate governance experts often compare Musk’s position with that of Steve Jobs, Apple’s co-founder and longtime leader. After news of his cancer diagnosis in 2004, the company’s shares became especially sensitive to rumors. In 2008, a false report of Jobs’s death caused Apple’s stock price to fall 9%.
Tesla shares have also reacted to Musk’s public statements and political activities. In 2025, when he focused on working in the U.S. administration, Tesla shares lost nearly half their value between January and April.
Despite having no formal succession plan, Jobs had created an internal leadership-development program at Apple in advance – Apple University. When he stepped down in August 2011, his successor, Tim Cook, was already a well-known figure on Wall Street. Apple shares initially fell 5%, but later recovered.
Musk also has executives capable of managing the day-to-day operations of SpaceX and Tesla. However, it remains an open question whether they have been able to absorb and institutionalize his strategic vision and unique management abilities within the organizations.
Sooner or later, SpaceX will have to publicly discuss its succession plan. Investors are aware of the companies’ dependence on Elon Musk, but the risk of his departure remains a secondary factor in their valuations.