Very few IPOs changed the rules to allow themselves to be incuded in significant indexes far faster than the rules previously allowed, and then slipped below their initial offering.
Did musk explicitly claim he expected exceptional returns? I don't think I'd be surprised either way, but I'm not sure what he's actually said.
As for timing there's no universal answer, stock changes are usually announced a few trading days before it's effective so funds can use that time to perform their rebalances. I presume most of the funds that needed to start tracking SPCX started buying pretty early so they were properly balanced on the day it took effect it might have even been part of the initial pop though they could have also waited for the first tranches of insider shares that were released (I think there were some relatively early releases as part of the IPO?).
They managed to maneuver "immediately and with no profit" and now they're tanking. That's bad, all of us with a 401k are losing money because of it. The people pointing this out are not the problem, SpaceX's (or I should say xAI's performance) is the problem.
I understand that investments made during the short lived peak would have lost money and that some amount of 401k will have lost money, but only for the purchases of indexes made during the peak, that may be substantial however, I'm not sure how transitions that add or remove stocks from an index work, there must be some mechanism to soften the impacts of the change, but I'm not an expert in that field.
Is it your contention that if they had have followed the standard path for inclusion, and then went on to have a similar share performance, then you would be OK with it?
https://www.nasdaq.com/articles/what-happens-to-ipos-over-th...
What do you think will happen to SpaceX share prices when roughly 18x the number of shares at IPO are released?
From a company that only made $18bn in sales last year and lost $5bn. For reference, Aramark, a company basically nobody has heard of made as much money and even turned a $0.5bn profit.
SpaceX shouldn't be worth more than $30 in 1 year's time.
Of course, irrationality can be an extremely strong force, so let's see.
https://companiesmarketcap.com/largest-companies-by-revenue/...
You've just told me that "the financials of an incompetent commercial food service provider" are better than those of SpaceX.
Aramark is profitable and SpaceX is wildly unprofitable[1] :-)))
* * *
[1] Almost nothing SpaceX does points at SpaceX scaling to huge profitability. The rocket business is super capital intensive and losing money. And its biggest customer by far is Starlink. Starlink is profitable, but even so, if Starlink hiccups, SpaceX rocketry goes kaput. Oh, the second biggest customer is the US government, and you only need one hostile US administration for that business to go away. xAI is a 2-bit player in the AI space and it's losing money hand over fist.
Can you name even one example in the last 50 years?
That said, I'm also not sure how accurate that is.
I was responding to the person pointing to this as confirmation of the long-running social-media-populist narrative surrounding this IPO. I consider that confirmation bias. I was not responding to the narrative itself, on which my only positions are: a prior against social media populism, a prior towards our financial institutions, a prior against trusting Musk, and a prior against trusting our current governance.
In a world where retail basically has no access to true IPO pricing, I don't think this is untrue for the majority of investors.
Jamming SpaceX directly into a bunch of indexes just because Musk wanted it (and everyone is a coward or complicit) stunk of "scam" in a very different way, though.
Investors who do have conviction here most likely see this as the platform vehicle for everything else coming through the pipeline. Again I could not buy into that but I think it’s a far cry from a scam.
For example, he's talking about data centers in space as the "everything else coming through the pipeline" and space data centers are an obvious engineering boondoggle, but sound cool to people that don't know anything about data center design or the challenges of space engineering (ie heat rejection)
Plenty of companies have traded at prices that assumed almost everythign would go right. Most of those expectations eventually proved wrong but that doesn't retroactively make them scams.
If the argument is that space data centers or some of these future initiatives are technically unrealistic, then criticize those ideas on their merits. If they're impossible or economically irrational, the market will eventually price that in, even if it takes a long time horizon.
Fuck, even Grok would have told him this.
The SpaceX IPO was intentional deception - no doubt.
You may be passionate enough to say intentional deception no doubt. I would argue I am happy to let the market figure it out. It may take a while but eventually over a long enough horizon it should figure it out.
1) The price is insane
2) The price is a work of great financial engineering
3) The price isn’t a scam
You asked how the ideas fit together. I explained. Now you’re telling me they must be inconsistent without identifying the contradiction. I typically don’t deal in feelings in these types of topics but I am aware this is a very passionate topic and person for many. That’s just not me. Good luck with your efforts.
Or Musk pushing NASDAQ & co to fast track SpaceX into their indexes, to force institutional investors to buy SpaceX?
Or about Musk & others weakening analyst protection through the current US administration cutting legal failsafes so that now basically every analyst on the market never releases negative share projections?
At which point do we accept that these billionaires push these systems until they crack, "legally", because they buy the people making the laws.
The first points are just facts. Not "harshest classifications".
I like to think in shades of gray and I am somewhere in the middle. Tesla? Amazing product, crazy valuation. SpaceX, some of the underlying products are indeed very valuable but the valuation is again out of this world, no pun intended. The market can stay irrational a lot longer than I can stay solvent. Would never take a short against Elon but I also would never invest into his businesses.
Just so we're clear: You think that the only company selling EVs in the USA for a net profit is a scam?
What do you call Rivian, Lucid, Fisker, Bolinger, Lordstown, Slate, and Aptera?
Slate has been conspicuously silent about orders since the day after launch. Lucid is on the brink of bankruptcy. Fisker has gone bankrupt... twice. Lordstown no longer exists (with assets purchased for pennies on the dollar by their former CEO). Aptera has reorganized more times than I can count, and has been planning to release their product any day now for over 10 years!
Rivian actually lost a lawsuit this year for misleading investors about the potential profitability of their product leading up to IPO. An IPO which raised more money in one fell swoop than all the external funding Tesla had in their entire existence. By your own metric, is Rivian not a bigger scam than Tesla?
By the way, a bad fact for Rivian in that case was that they sexually harassed a female exec, who turned around and revealed (in her own lawsuit against them, just weeks before IPO) that the expected ASP of the R1 would be less than the production cost. Oops.
And, somehow, Tesla is the problem. Yea, that makes sense.
1. Have you seen what the Chinese have come up with? https://x.com/pronounced_kyle/status/2075526710003413004
2. None of these things are, where the money is supposed to come from in the future: https://www.youtube.com/watch?v=IHD8BDFYyGI
I don't know the future, nor do I give investing advise. I don't want this stock.
I have no opinion on whether other companies might catch up to them (either tomorrow or 10 years from now), but your quote is a completely accurate statement about the world as it exists today.
If you read the IPO prospectus, none of theses things is were the money is supposed to be earned in the future. The money comes from the 3rd pillar, AI. Again AI is the biggest loss maker they have.
I would not invest in their launch services, nor in their AI. But I would invest in StarLink if they spun it off and if it were decently priced.
So in other words, yes, it's a scam.
If everyone loses their money it will be a scam. If people get rich he will be a financial engineer.
These aren't two different things. The winning side will make up reasons why they are right, and the losing side will make up excuses why they were wrong.
No matter what, your money is going to Elon and friends. That's one of the schemes.
There's plenty of other schemes too, like merging in Twitter and an AI company to confuse investors and inflate valuations.
I'm not calling it a scam either. I'm saying it entirely depends on whether this insane level of scheming causes people to lose a trillion dollars or gain a trillion dollars, then history will be rewritten to match the narrative.
If you spot the regulator looking the other way and try to sneak one past, is that legitimate, or sketchy? What if you recently had the influence to make them look the other way or be under-resourced?
You could argue 'treason' is a better word than 'scam'.
I was hoping you were headed to "...beyond scam" into serious fraud or something. Regardless how this is categorized, everyone (banks, stock market, the executive branch) is complicit, and I think SpaceX stock should have stayed off the public market.
so was Madoff
Like spacex isn't going to be the world's first 100 trillion dollar company because there isn't that much money. That's nearly as high as the global GDP.
Crazy growth rates are not possible.
That doesn't really matter. As we saw with crypto valuations, market cap is just number of shares * last price.
If you have 1 trillion shares and one is traded for $100 you have a 100 trillion market cap.
It's almost as if SpaceX would have to use another planet's resources to generate money for that valuation. Oh wait...
They’re thinking “Tesla stock trades at absurd P/E for no reason other than vibes… this one might, too!”
Same with all his other companies.
Second, I don't know the details but it's extremely unlikely that most SpaceX folks have been able to sell any shares. Typically there's a 90–180 restricted window where pre-IPO holders are not allowed to sell.
The limited float could theoretically drive up, but as I noted, it wasn't added to the Nasdaq 100 until two days ago, so it's not something we can really attribute to that.
Btw, I loathe Elon Musk as a human, but am just clarifying some facts.
“It's easier to fool people than to convince them that they have been fooled.” —- Mark Twain
https://news.ycombinator.com/item?id=48374430
(SpaceX shorts have made ~$4B in profits on paper so far, as of this comment)
Seems like if the company is really doing great you'd want to retain ownership. Raise from bonds or something. Put simply, if it's valuable why would anyone sell it?
Elon bought them an imaginary horse ...
Tesla isn’t behaving rationally, there is no way to tell whether SpaceX will behave rationally or not.
It seems like it’s becoming somewhat more rational, but all these stocks just seem to be incomprehensible to me.
I own no Musk stock and never short anything.
I don’t think that affects the opinion I stated in any way.
Some people are like this. Ever major religion and thought movement throughout history recognizes people like this. They need to have more for themselves even (and in many cases especially) if it means less for others. In pre-history when we lived in small groups and we really knew each other the group could identify and isolate and disempower them. Populations grew and so did their ability to lie and get away with it. To deceive and amass power. To exploit the systems that we built to help the collective to their own ends.
That said, he needs the wealth to keep the whole machine from falling over. One element might be stable but the rest is overstretched and about to go bankrupt at any minute. He is doing this to get back control of Tesla while also investing in AI and not exploding.
He is running forward falling and his wealth legs need to keep up or it all goes down hard (and takes a bunch of bagholders with)
Spending it is not the goal, having the wealth is.
Remember the ridiculous Tesla compensation package that he demanded? That's about having wealth, it's not about spending it.
> "I think SpaceX is a solid well run company"
This should be all the proof you need that it's a scam. Here's why:
The company isn't "SpaceX" it's "SpaceXAI", and nearly all of the valuation comes from the "AI" component, not the "SpaceX" component.
Many of those early investors would have invested in a rocket company, I doubt many of them were overjoyed to be saddled with all the debts from an AI company and Twitter.
Q2 call is expected in a month or so? But they also state Aug 21 is 37% of shares will go public.
SpaceX is a pretty important company not just for "the market" but also for many other things (see Russia/Ukraine war).
Fair warning: I know nothing about all this.
When you buy equities, if the company turns out shockingly successful beyond most peoples probable expectations you dont simply want your investment to just stay flat, you want to make multiples of your money. In order to do this, you simply cant start from a 2T marketcap. No company worth 2T can make you 100x your money or even 10x or 5x your money in a reasonable amount of time given the overall size of the economy.
To hedge against the stock going up and making your buy in even more expensive.
> SpaceX is a pretty important company not just for "the market" but also for many other things (see Russia/Ukraine war)
Starlink, which was rolled in to SpaceX, is/was profitable and it is a factor in Ukraine.
The rocket division is not profitable, but I sense that there might be a path to a profitably operating business.
As for the X/xAI piece, who knows? Long-term it seems like a moon-shot. I appreciate the irony that it's in the wrong division.
If you wait till the price comes down to its natural level, you'll be able to buy more of the company for less money.
True, if Twitter and xAI stopped existing, there would be an uproar from all the suddenly unemployed disinformation botters.
In addition to looking at the "fundamentals" of a company like cash flow and profitability, there is also a 'meta-game' that traders (as opposed to investors) have to look at:
> A Keynesian beauty contest is a metaphorical beauty contest in which judges are rewarded for selecting the most popular choices among all judges, rather than those they may personally find the most attractive. This idea is often applied in financial markets, whereby investors could profit more by buying whichever stocks they think other investors will buy, rather than the stocks that have fundamentally the best value, because when other people buy a stock, they bid up the price, allowing an earlier investor to cash out with a profit, regardless of whether the price increases are supported by its fundamentals and theoretical arguments.
* https://en.wikipedia.org/wiki/Keynesian_beauty_contest
"whereby investors could profit more by buying whichever stocks they think other investors will buy, rather than the stocks that have fundamentally the best value"
Usually the public starts buying IPOs in open market operations on the secondary market, which removes some of the shiny and "limited" factor.
It all depends on your broker. My Australian broker gave everyone ~40% of their request and refunded the rest (typical Australian practice for IPOs). An American friend put in for >20x as much as I did with his US broker, they gave him nothing and refunded the full amount.
Edit: why would this get flagged lol?
In normal inflation you can at least buy commodities. But the US economy is organized in a way that will concentrate the money on stocks, not commodities.
The Fed announced they will transition away from QE yesterday. When they did that 5 years ago, a lot of things happened and they completely gave up on the idea.
SpaceX is an AI company without a frontier model. Until Jan 2026 SpaceX was an aerospace company. Then xAI was merged into SpaceX on January 30, 2026, so SpaceX became an AI company less than 6 months ago.
Mainly it’s a REIT that bought a bunch of hardware which is now depreciating like fresh lettuce. They don’t even have a way to use it productively for AI purposes themselves and are instead renting it to competitors, who are using it to lap them.
Musk for Prime Minister is what I am hearing here.
Unless they manage to build such a model, then their plan looks like they intend to be an AI _infrastructure_ company. Which is probably viable and healthy business! One with lots of competition and low margins that is completely misaligned with their current valuation.
- offering to pay some nominal subsidy for all households electricity bills in the region.
- committing to only closed loop cooling
- if the location is amenable, then providing free heating to neighboring buildings.
- only building in blighted locations with no current economic value
Other random ideas: I wonder if anyone is considering building server racks directly into offshore windfarms. Replacing failed hardware is annoying, but surely more economical than in space where IIUC, there _is_ no plan to ever maintain hardware at all, just deorbit and replace. All the water is right there for cooling (though I'm sure saltwater has its own problems with corrosion). While the current US administration is clearly anti windmill, that might work nicely in Europe.
Now I think SpaceX is massively overhyped, but is the share price returning to IPO opening not just a sign that the banks accurately estimated something?
Your bank will get a ton of orders from institutional investors of how many shares they want at a given price. You will have a preference as to which investors you want on your cap table. Almost all of those investors value your stock less than the "pop price" (which includes the investors you want on your cap table). So you'll need to target the IPO below the "pop price" so you get them on your cap table.
You're probably picking investors based on how likely they'll let you stay on the board / CEO and if you think they're just going to dump the stock during the IPO (which would be bad for it's price).
So (unlike the SpaceX IPO) you're going to sell relatively little shares to retail who will buy at any price which during the opening days will cause it to spike as the demand (in nominal dollars) per share is beyond the IPO price target.
> but is the share price returning to IPO opening not just a sign that the banks accurately estimated something?
Sure they estimated something. But there's a ton of different things that can be estimated.
Ideally priced from the perspective of pre-IPO investors.
This seems like an argument for outside investors not to buy IPO stock.
Look at the financials and the price, and you as an individual get to determine if it's worth buying (or selling).
What is so controversial about saying that SpaceX seems overpriced?
Nobody said anything about fairness or duty.
My point was that if the seller is trying to maximize its self-interest by maximizing the IPO price, leaving no room for growth after IPO, then buyers probably want to take a pass at that price.
Surely you understand it's inverse of an IPO that jumps after intro, right?
SpaceX is not seen by investors as worth its price. This is because it is not.
It seems like the SpaceX IPO really breaks the traditional notion of market cap.
Market cap has an unstated assumption that most of a company’s stock could, in theory, be traded unencumbered. Thus shares * price gives a very rough view of the value of the company. Everyone understands that this valuation has problems: it attributes the last marginal trade to the entire stock, and doesn’t account for large purchases/sales. But it’s useful nonetheless.
But with SpaxeX, only a tiny fraction of those shares are even theoretically tradeable, so it seems bizarre to calculate valuation using price * shares. I think this is the source of discomfort around the $2T market cap.
It seems like, similar to how there are long and short term liabilities, there should be long and short term market caps.
“Short term market cap” would be price * “number of shares that could theoretically be available for trade within the next year”, from all sources (including vesting employee options, expiring lockups, etc).
“Long term market cap” would be price * total authorized shares.
So SpaceX’s long term market cap would remain at $2T and its short term market cap would be, say, 5% of that (about $100B).
Market cap is, at best, a rough valuation of the company. It has many confounding variables of which liquidity can be one of them. That's part of why investment analysts put out price targets for companies. The counterpoint is that market price is driven by what people are actually paying.
One of the major challenges with valuation is settling on a methodology overall. There are many ways, appropriate and not, to value a company. Many will have different estimates for value. There are also factors, like control premium, that start to become relevant when you try to completely acquire a company.
One of the benefits of an open and liquid market is that future availability of locked shares can be priced in early. We all get the benefit of consensus information.
If the company doesn’t quickly show a financial picture that matches the sky high pro formas then even anything close to those levels will become extremely hard to justify.
The bond markets have already turned very negative on SpaceX with extreme red flags developing there.
Without any actual, meaningful news coming out of the company (important financial update, new product, bankruptcy etc), stock price moves are only meaningful to day traders, not anyone who is doing serious investing. LA Times is making themselves the same as CNBC or sources you find on Yahoo finance.
Something like 100k flights cancelled. Upgrading the planes to have starlink is onerous, high idle/offline time, and capital intensive.
The total potential market for Starlink shrinks by at least a few hundred thousand people each week.
I didn't buy a single share.
It seems direct listings gained some popularity but overall most companies seem to rely on the traditional underwriter model.
According to [0] -
> 22 companies went public on major exchanges using IPO auctions in the U.S. between 1999-2008, but there have been none since then, as of May 2025. Starting in 2018 when Spotify went public, there have been at least 20 companies that have gone public using a direct listing. With both IPO auctions and direct listings, underwriters do not have discretion to allocate shares to their preferred clients.
also: can't pump the ipo and get exit liquidity for vc through a dutch auction
But really that's how all IPOs work, basically. You have one of more investment banks that underwrite the offering. They're basically guaranteeing to sell a certain number of shares to their clients at a given price. Those clients can be institutional investors, pension funds, high net worth individuals and so on. But there's a feedback loop here where clients might push back on a certain price.
IPOs love these sorts of investors because they tend to buy and not sell. If everyone sells the IPO will flop. Retail investors are far less "loyal".
The IPOing company also has levers where they can manipulate the price, most notably on the supply side ie by limiting or expanding the size of the float. SpaceX's float (as a percentage of the company) was actually really small.
What's unique about the SpaceX IPO was that it would immediately become one of the world's most valuable listed companies so there'd be a lot of induced demand from index funds. The underhanded (IMHO) aspect to all this was that the rules were deliberately changed so passive investors would be exposed almost immediately rather than first allowing some form of price discovery by the market. NASDAQ capitualted. S&P did not.
I guess the real manipulation here is the fiction that SpaceX is an AI company, which ultimately goes back to a series of bailouts for terrible decisions going back to the Twitter purchase. SpaceX's AI pitch was orbital data centers, which make no sense, and using their ill-gotten NVidia chip allocations to rent them to Google.
I'm not invested in this myself, figuratively or literally.
I guess for any stock to rise, there have to be people thinking it will be worth more in the future.
I presume there is a way to mathematically determine how atypical the SoaceX stock is behaving. Does anyone have a reference to how this would normally be done?
> However, a year later, we see that the majority of companies are either outperforming or underperforming the market by more than 10%. We also see that more companies are underperforming than beating the index (the red bars stretch below the 50% line).
> That seems to indicate that for some companies, the initial IPO enthusiasm wanes or expected earnings are not met, and investors reprice the IPO to reflect the actual, slower growth of the company.
> Three years after their IPO, we calculate that almost two-thirds of IPOs are underperforming the market, with most (64%) more than 10% behind the market’s returns.
* https://www.nasdaq.com/articles/what-happens-to-ipos-over-th...
> 56% of IPOs bought at the offer price lost money after 3 years. That number rises to 57% after five years. The numbers are higher when bought at the first day closing price: 60% lost money after 3 and 5 years. Worse than a coin flip.
> Only 19% of IPOs doubled or more after three years and 22% after 5 years when bought at the offering price. The numbers were worse when bought at the closing price.
> Of course, the lottery-like returns were possible, but it amounted to about 0.4% of all IPOs after 3 years and 1% after five years.
* https://novelinvestor.com/the-hype-and-hot-air-around-ipos/
Interview with a researcher that has looked at IPOs over the last few decades:
> We’ve previously compared IPOs to lotteries that are prone to inflated valuations and low returns. Today we welcome “Mr. IPO,” Professor Jay Ritter onto the show for a deeper dive into IPO performance, for his insights into SPACs, and to hear his research into why economic growth doesn’t correlate with stock returns. Early in the episode, Jay unpacks how long-term IPO returns perform against first-day trading. While exploring the role that venture capital plays in tech IPOs, Jay talks about why negative earnings don’t affect tech IPOs in the short-term before sharing how skewness factors tend to impact young companies. Reflecting on how IPOs are usually underpriced, Jay discusses how the interests of companies are not aligned with the interests of IPO underwriters. After looking into IPO allocation, Jay compares the 2020 ‘hot IPO market’ with the internet bubble of the late 90s. Later, we ask Jay about what special-purpose acquisition companies (SPACs) are and why they’ve exploded in recent years. His answers highlight their investing benefits, risks, and why SPACs might be a better option for companies than IPOs. We examine how SPACs have historically performed and then jump into our next topic; why economic growth isn’t a good indicator that a country is worth investing in. He touches on why returns don’t correlate with economic growth, the place of capital gains and dividend yields when investing abroad, and how innovations in an industry can lead to higher stock returns. We wrap up our conversation by asking Jay for his take on whether the stock market is efficient before hearing how he defines success in his life. Tune in to hear our incredible and informative talk with Jay Ritter.
* https://rationalreminder.ca/podcast/139
Picking individual winning stocks can be hard:
* https://en.wikipedia.org/wiki/A_Random_Walk_Down_Wall_Street
Anthropic could go either way. My guess is that if the financials aren't Enron scale flaming garbage, they'll be fine.
SpaceX bond worth 10% less than issue price – heading for junk bond status
PS: I am not saying SpaceX is a good investment.
ffs, wake me up when it's at least 10% below what it IPO'd for. The idiotic tulip mania that followed in the few days after it floated was noise, but as of today, it seems the IPO price was pretty much right. However, endless headlines about the price crashing etc.
From a fundamentals perspective, it's an insane price, obviously. But the narrative that it's all coming crashing down is obviously not correct (today).
No real skill, no real research. Just ride the hype train, shrug if you lose, and never gloat when you win. Simply take the profit, stfu, and buy a Porsche or some RAM.
SpaceX is a phenomenal company. I've wanted to buy in since 2009. But the stock is the exact inverse of my ideal single-stock investment thesis--huge downside with severely limited short-to-mid-term upside, given the huge premium already being paid.
Maybe take a look at Rocket Lab :)
Many people can soon sell their SpaceX stock, I don't think the S&P will safe them later.
Then he turned full ultra right wing nationalist who engaged in science denial. Supported a president that is unquestionably racists and unquestionably fascists. And he made this clear by doing some Nazi salutes on top of that.
Then he used that influence to sell a completely false idiotic story that cuts to discretionary spending could 'fix' the budget deficit, like a complete idiot who had never watched 2 youtube videos about the US budget. Then used to slash and burn many beneficial programs while having no impact on the deficit what so ever.
He was supposed to be science and engineering progress driven, but then allied himself with ultra-right wing anti-scientific fascists who try to dismantle the whole education system in favor of at best best creationism or more likely nothing at all.
Not sure why its hard to understand. The only people who don't understand are ultra-right wing facists who don't understand why other people don't want to support ultra-right wing facists.
Does that explanation help?
Also, the reality is, Elon made himself a massive public figure deliberately, he very publicly embraced one side of the culture war and make his opinion on every public constantly. He literally one of the most important people because he literally bought one of the largest media platforms and made sure it fully embraced right wing points of view.
You are complaining why Elon is in public debate and people are so interested. That's because politics is a public argument between different parties, and Elon has used all his influence to support one side of that. And that is the result.
And not just in the US, Elon tried to insert himself into politics of other nations, such as Britain or Germany as well. Making most of the western world angry.
Why are you surprised that he gets treated like a politician when he acting like a politician?
You can't be the CEO of total independent technocratic companies and at the same time be a public ultra-right wing facist supporter who endlessly engages in a public culture war. Specially if those companies are directly linked to him view voting shares that give him ultimate power.