North Carolina State Treasurer Brad Briner announced Wednesday that his pension fund will refrain from buying shares in SpaceX's initial public offering, pointing to concerns about the company's valuation.
Briner, who manages roughly $200 billion on behalf of teachers, firefighters and police officers in the state, told CNBC's "Squawk Box" that SpaceX's price tag is simply too high for the fund to justify a private purchase. He referenced a reported $1.77 trillion valuation in explaining the decision, and noted that "SpaceX at $1.75 trillion is a big valuation."
Briner emphasized the fund's return objectives when outlining the rationale. "We're trying to make a high single digit, predictable rate of return for our retirees," he said, adding that valuation must be an input to investment decisions. He praised Elon Musk as an entrepreneur and highlighted SpaceX's technology and launch business, but said those strengths do not overcome the pricing issue for his office.
SpaceX is expected to set an IPO price on Thursday and begin trading on Friday, according to the timetable discussed publicly. The company plans to offer 555.6 million shares at $135 apiece, which would raise about $75 billion and imply an enterprise valuation of roughly $1.8 trillion for the aerospace manufacturer.
Although Briner said the pension system will not take a private stake in SpaceX, he indicated the fund will obtain exposure after the company goes public via existing index allocations. "We will ultimately participate in SpaceX through our index positions in our public equity," he said, "but we don't have any on the private side."
The treasurer contrasted his office's approach to SpaceX with prior moves into artificial intelligence startups. North Carolina invested about $40 million in OpenAI and committed roughly $250 million to Anthropic earlier this year. Briner said that Anthropic in particular was an opportunity the fund found "completely mispriced" at the time of investment, and that the combined position is now worth more than $600 million. He added that those investments reflect the power of the underlying technology when deployed.
Contextual note: The comments came during a television interview Wednesday and reflect the treasurer's stated portfolio objectives and valuation concerns as described above.