North Carolina treasurer passes on SpaceX citing valuation concerns; favors OpenAI, Anthropic
North Carolina state Treasurer Brad Briner recently made headlines by stating that the highly anticipated IPO of SpaceX is too pricey for the state’s pension fund to invest in. With a responsibility to manage approximately $200 billion for the state’s teachers, firefighters, and police officers, Briner has opted to steer clear of acquiring shares in the Elon Musk-led company.
In a recent appearance on CNBC’s “Squawk Box,” Briner explained that the state has concerns about SpaceX’s valuation, which currently stands at a staggering $1.77 trillion. He emphasized the importance of considering valuation when aiming to achieve a high-single-digit, predictable rate of return for retirees. While acknowledging Elon Musk’s remarkable entrepreneurial skills and the innovative technology behind SpaceX’s rocket launches, Briner expressed reservations about the company being fully priced at its current valuation.
SpaceX is set to price its IPO on Thursday, with plans to sell 555.6 million shares at $135 each, raising approximately $75 billion and valuing the aerospace company at around $1.8 trillion. Despite the excitement surrounding SpaceX’s IPO, Briner’s comments shed light on a broader discussion among institutional investors about the company’s valuation and potential investment risks.
Instead of investing in SpaceX, Briner has directed the state’s pension fund towards artificial intelligence startups like OpenAI and Anthropic, which he believes offer more favorable risk-reward opportunities. North Carolina has allocated around $40 million to OpenAI and committed approximately $250 million to Anthropic, with the latter investment now valued at over $600 million.
Briner indicated that North Carolina’s pension system is likely to gain exposure to SpaceX through index funds once the company goes public, rather than holding private shares. While the state treasurer recognizes the appeal of SpaceX as a unique asset with a strong presence in rocket launches and satellite internet, he remains cautious about the company’s current valuation.
As SpaceX gears up for what is expected to be one of the largest IPOs in history, the debate among investors continues regarding the company’s valuation and long-term growth prospects. Briner’s strategic approach to investment highlights the importance of carefully evaluating opportunities and considering risk factors in pursuit of sustainable returns for retirees.
SpaceX did not provide an immediate response to CNBC’s request for comment on Briner’s remarks. The evolving landscape of investment decisions underscores the need for prudent financial management and a thoughtful approach to portfolio diversification.
