One risk factor the company notes in the SpaceX prospectus is that shareholders may not be able to pursue certain legal claims because of a “requirement for mandatory arbitration.”
We talked about this idea last year: Now companies can basically forbid shareholders from suing them, by requiring all shareholder claims to be brought in mandatory arbitration. As far as I can tell, no one has done it yet. Now SpaceX might. SpaceX is sort of obviously the best company to do it: Elon Musk is going to do a bunch of wild stuff that does not meet traditional standards of corporate governance, and that’s what shareholders are signing up for, and if they don’t like it they shouldn’t buy the stock. SpaceX is a gamble that the entirety of Musk — the visions of space data centers and Mars colonies, the energy, the wild flouting of governance norms — will pay off for shareholders, as it mostly has in the past. Quibbling about the governance norms is stupid.
But if SpaceX does it and it works, then 100 companies that are not run by Elon Musk are going to try.
Source: SpaceX super-voting