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SpaceX, Other Mega IPOs Denied Fast Index Entry by S&P

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Re: SpaceX, Other Mega IPOs Denied Fast Index Entry by S&P

#421

Post by Panzer04 »

expedition32 wrote: post #311
Panzer04 wrote: post #198

Earlier quoted context omitted.

The real issue is that existing shareholders will all be eyeing each other wanting to exit at the highest price it'll ever be. That's a lot of selling pressure. I can't imagine many people seriously believe SpaceX is a business worth 1.75T.

Satellite internet is not a new invention- Iridium already did it and they went under. Nice for war zones and remote areas but not much else. Besides the Chinese are launching their own network which will mean a price war. And the Chinese tend to win those.

Starling is an entirely different beast. However, it's addressable market is not unlimited. More people live in urban and suburban areas with fixed line internet than ever - the only real customer base is rural, and it still needs to compete with conventional mobile internet.

Starling is indeed very good, but it alone doesn't get spacex to 1.75T

Re: SpaceX, Other Mega IPOs Denied Fast Index Entry by S&P

#422

Post by Panzer04 »

d--b wrote: post #202
Panzer04 wrote: post #197

Earlier quoted context omitted.

0.8% of drag is a lot when you can do basically the same thing by not strictly following the index. There are funds from Dimensional and Avantis that are basically just index funds but with a bit more leeway to avoid these obvious pitfalls, and from what I saw they do perform approximately 0.5% better per year.

0.8% is substantial indeed, but if i understand correctly, it’s 0.8% on that one stock, so much less on the index itself. Those funds that perform better probably take a higher management fee that might cancel out the gain. May be worth it to have a smoother return though.

As in, current indexes perform that much worse. Frontrunners around index rebalancing etc. SpaceX is the same idea, just way more obvious. People knows what the index funds are going to do, and so they exploit that.

The alternative funds are a little pricier, but not so much so as to negate the inherent performance advantage. Typical cost ratio is 0.1-0.5% depending on the niche (wide indexes are cheaper, more niche things like small cap value cost more)

Re: SpaceX, Other Mega IPOs Denied Fast Index Entry by S&P

#423

Post by JumpCrisscross »

tasty_freeze wrote: post #41
JumpCrisscross wrote: post #3

The amount of misinformation around this topic was absolutely nuts over the past few days. Good rule of thumb: if a YouTuber or other influencer was pitching doom and relaying this rule change by S&P as a fait accompli , stop following them. (It was a common misconception on this thread: https://news.ycombinator.com/item?id=48364055 .)

Do you think that all the alarm had any effect on the blocking of the rule change? Is the right time to complain about a possible change is after it has been decided?

> Do you think that all the alarm had any effect

Nope. S&P management probably wanted the rule changes passed.

Re: SpaceX, Other Mega IPOs Denied Fast Index Entry by S&P

#424

Post by forlorn_mammoth »

l23k4 wrote: post #179
vannevar wrote: post #124

Earlier quoted context omitted.

>All that an inclusion of these new companies would accomplish is a bailout of their stockholders by pension funds and ETFs where millions of regular people shoulder all the downside risk. Carvana is the poster child for this. It's astonishing that a company with a history of shady practices, and that has yet to offer a convincing explanation for why it is not a scam, is part of the S&P 500.

Ah, so you'd like the passive broad market index which contains the 500 biggest good companies? Do tell us if you find one I guess.

No, but how about the 500 that

have been profitable under GAAP accounting rules for at least 12 months

have a public float of at least 10% (so that new investors have some governance rights)

have traded for at least 12 months (and won't have sudden changes in public float or shares available due to lockups and recent listing)

Re: SpaceX, Other Mega IPOs Denied Fast Index Entry by S&P

#426

Post by undersuit »

czhu12 wrote: post #404
Analemma_ wrote: post #393

Earlier quoted context omitted.

The new stocks are still going in, they're just going in after a year (the normal rules), rather than 5 or 15 days. The outrage here wasn't that the stocks were going into the indexes at all, it's that they were going in before price discovery, several quarters of earnings, more float, and expiration of insider lock-up periods, which seemed especially sketchy because of the (correct or not) perception that these IPO…

It seems the general consensus on HN is that they are overvalued and for sure will collapse in value down the road, I could imagine some frustration down the road if these companies actually become, say, 4T by the time they get added to indices.

There are different indices if you want to be exposed to that risk.

Re: SpaceX, Other Mega IPOs Denied Fast Index Entry by S&P

#427

Post by tejohnso »

tcp_handshaker wrote: post #383
rchaud wrote: post #112

Good. Indexes are supposed to be slow-moving, precisely due to their entry requirement of sustained profitability that skews towards mature companies. All that an inclusion of these new companies would accomplish is a bailout of their stockholders by pension funds and ETFs where millions of regular people shoulder all the downside risk. SpaceX and OAI stock will be available through Robinhood, Questrade and all the o…

At this moment, there is so so much, publicly available information [1] on the fact the SpaceX IPO is the biggest scandal in the long history of Wallstreet insiders fleecing the "Johns". A scandal orchestrated and cheered on by the NASDAQ, as well as Goldman Sachs and JP Morgan the underwriters, that if you spend any money on it, you deserve to be parted with your money. And if you have a 401k...you are forced to buy…

> if you spend any money on it, you deserve to be parted with your money.

Yet it's already trading at >20% over IPO price on Bitmex

Re: SpaceX, Other Mega IPOs Denied Fast Index Entry by S&P

#428

Post by l23k4 »

forlorn_mammoth wrote: post #424
l23k4 wrote: post #179

Earlier quoted context omitted.

Ah, so you'd like the passive broad market index which contains the 500 biggest good companies? Do tell us if you find one I guess.

No, but how about the 500 that have been profitable under GAAP accounting rules for at least 12 months have a public float of at least 10% (so that new investors have some governance rights) have traded for at least 12 months (and won't have sudden changes in public float or shares available due to lockups and recent listing)

Why is that set of rules particularly good?

Re: SpaceX, Other Mega IPOs Denied Fast Index Entry by S&P

#429

Post by l23k4 »

tcp_handshaker wrote: post #383
rchaud wrote: post #112

Good. Indexes are supposed to be slow-moving, precisely due to their entry requirement of sustained profitability that skews towards mature companies. All that an inclusion of these new companies would accomplish is a bailout of their stockholders by pension funds and ETFs where millions of regular people shoulder all the downside risk. SpaceX and OAI stock will be available through Robinhood, Questrade and all the o…

At this moment, there is so so much, publicly available information [1] on the fact the SpaceX IPO is the biggest scandal in the long history of Wallstreet insiders fleecing the "Johns". A scandal orchestrated and cheered on by the NASDAQ, as well as Goldman Sachs and JP Morgan the underwriters, that if you spend any money on it, you deserve to be parted with your money. And if you have a 401k...you are forced to buy…

[flagged]

Re: SpaceX, Other Mega IPOs Denied Fast Index Entry by S&P

#430

Post by vannevar »

infecto wrote: post #391
vannevar wrote: post #385

Earlier quoted context omitted.

If "many businesses" operate this way, then "many businesses" are committing fraud. You can't publicly claim to be selling loans to an unrelated company when in fact you control that company.

The latter has not been proven and the former is pretty normal for business. We will see how it plays out in the court and markets.

The second law of thermodynamics hasn't been proven either, but I'm fairly confident in it. ;-)
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