New Mexico Rejects Divestment From Elon Musk Firms
The state investment council will keep $188 million in holdings despite calls for a complete divestment.
Updated on Oct. 29, 2026 in Investing
Live Poll
Should your state government divest public funds from companies based on the owners' political actions?
The New Mexico State Investment Council has rejected a formal request to divest from companies owned by Elon Musk. Officials maintain that the holdings represent a minimal fraction of the state's total portfolio and that exiting them would violate fiduciary duties.
Why it matters
The decision underscores the tension between political activism and institutional fiduciary responsibility. Officials noted that divesting from passive indexes would likely increase management fees and trading costs for the state fund.
The $188 million in Musk-linked assets represents 0.25 percent of the $75 billion total state portfolio. Holdings include $147.3 million in Tesla stock, $37.3 million across various SpaceX interests, and $267,348 in Neuralink.
The players
New Mexico State Investment Council
The agency manages a massive portfolio of state funds and determines investment strategies based on risk-adjusted returns.
Elon Musk
He is the founder and CEO of multiple technology companies including SpaceX, Tesla, and Neuralink.
Senator Steinborn
The legislator initiated the request for the state to divest its assets from companies linked to the tech billionaire.
State Investment Officer Clark
The official is responsible for overseeing the state's investment portfolio and responding to fiduciary inquiries.
The details
State investment officers indicated that divesting from Musk-owned firms would necessitate exiting broad passive stock indexes. Such a move would require the implementation of customized portfolios, which the council warned would lead to higher operational expenses.
Timeline
1980s: New Mexico divested from South Africa over apartheid.
2007: New Mexico divested from companies linked to Sudan genocide.
2022: New Mexico divested from Russia following the Ukraine invasion.
October 22, 2026: Senator Steinborn requested the divestment.
October 26, 2026: State Investment Officer Clark rejected the request.
Market Dynamics
This refusal highlights a contrast to the council's historical divestment from assets tied to the 2022 Russian invasion of Ukraine. It signals a tightening of the criteria used by the state to weigh moral concerns against the fiduciary duty to maximize portfolio returns.
The state's decision ensures that current passive investment strategies remain intact, avoiding immediate shifts in portfolio management fees. Taxpayers and fund beneficiaries will not see a change in investment performance related to these specific holdings.
The takeaway
Institutional investors often prioritize broad market tracking over individual company exclusions to keep management costs low. This case demonstrates the practical challenges of aligning state investment portfolios with shifting political demands.
Further reading
Learn more about the state's financial strategies in New Mexico Investing.
Source note: This article includes information reported by Abqjournal.
Live Poll
Should your state government divest public funds from companies based on the owners' political actions?
