Economist and former Labor Secretary Robert Reich is not a fan of Elon Musk's SpaceX IPO, which is set to hit the market on Friday. In fact, he's calling it the biggest Ponzi scheme in the universe.
In a post on X Thursday, Reich shared a Substack article he wrote, saying: "Tomorrow's I.P.O. of SpaceX could turn out to be the universe's largest Ponzi scheme, and you and I are paying part of the price whether we like it or not."
Reich's critique is sharp and multi-pronged. First, the valuation. He notes that SpaceX is offering stock at roughly 100 times the company's total revenue in 2025, which was $18.7 billion. That's a "ballsy" move, he says.
Then there's the business itself. Reich points out that SpaceX's goals—interplanetary habitation and interstellar travel—are "inherently speculative endeavors." The IPO, he argues, is "nothing more than a show of faith in Musk."
But the governance structure really gets him going. Musk's Class-B shares will have 10 times the voting power of the shares offered to the public. Reich says shareholders will have "any voice whatsoever"—and not in a good way. It's a structure that concentrates power in one person, which he finds troubling.
And here's the kicker for everyday investors: even if you don't want to buy SpaceX stock, you might not have a choice. Reich laments that "a big chunk of Americans' retirement savings and pensions (as well as university endowments) will automatically be tied to SpaceX's market value" if they're in index funds. So your 401(k) could be along for the ride, whether you like it or not.
Reich draws parallels to Musk's ill-fated DOGE project and even to Trump's takeover of the U.S. government. "The closer you look at the SpaceX IPO, the more it looks like Musk's ill-fated DOGE. It also bears a striking resemblance to Trump's takeover of the U.S. government," he writes, adding that it all depends on the will of a man with "a giant ego and an insatiable thirst for money and power."
He's not alone in his skepticism. Senator Elizabeth Warren (D-Mass.) has called for delaying the IPO, warning of "misleading" or "inaccurate" accounting of valuation. So the fireworks are just beginning.
