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S&P 500 rejects SpaceX, also blocking entry for OpenAI and Anthropic

arstechnica.com

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Re: S&P 500 rejects SpaceX, also blocking entry for OpenAI and Anthropic

#41

Post by SkiFire13 »

kortilla wrote: post #32
figmert wrote: post #27

Earlier quoted context omitted.

Why is that relevant? The rules are in place for a reason, why does it matter what the percentage is? They're not profitable. When they prove they're worth the dollars, they can be included, per the rules. Also, S&P500 has a current market cap of $67 trillion, 0.3% of that is some $200billion. That is essentially a wealth transfer to the rich. They don't need it.

> That is essentially a wealth transfer to the rich. They don't need it. These are not valid arguments. The companies that get added to the S&P are always owned in some fraction by rich people. SpaceX is obviously majorly owned by Elon, but it’s also owned by regular employees, a bunch of private investors and other funds that regular people invest in. > They're not profitable. Right > When they prove they're worth t…

> SpaceX is obviously majorly owned by Elon, but it’s also owned by regular employees, a bunch of private investors and other funds that regular people invest in.

Is it really owned by them if Elon retains most of the voting rights anyway?

Re: S&P 500 rejects SpaceX, also blocking entry for OpenAI and Anthropic

#42

Post by LinguaBrowse »

zippyman55 wrote: post #3

Yep!! Respect to them. I was planning to move to an equal weight index but this gives me a little more time to evaluate options.

I’ve moved my S&P 500 investments to the Equal Weight index to reduce my exposure to AI. Quite aside from SpaceX, I think the large-cap tech companies are making some uncomfortably large bets on AI and any major upset could cause a domino effect.

But as so many ETFs have a significant stake in large-cap US tech stocks (the top 10 holdings of the iShares MSCI World ETF is entirely comprised US Big Tech, making up 20% of the value of the ETF), I found S&P 500 Equal Weight to be pretty attractive.

As for SpaceX itself? I feel the numbers involved all sound a bit unbelievable to me. I fear that there will be a rug-pull sometime post-IPO, and retail investors (and taxpayers, if the US Government ends up taking a stake, as they have recently indicated they might do for OpenAI) will inevitably be left holding the bag.

Re: S&P 500 rejects SpaceX, also blocking entry for OpenAI and Anthropic

#43

Post by JumpCrisscross »

viceconsole wrote: post #22
JumpCrisscross wrote: post #11

Earlier quoted context omitted.

> no clue how trillions of $ from their pension funds Pension funds don't tend to follow the S&P 500, much less automatically. They're sophisticated institutional investors like CalPERS [1] who dabble in everything from public stocks to private equity. It's other retirement assets, e.g. 401(k)s and IRAs, that tend to follow the S&P 500. But again, with substantial variation. S&P including these companies would have d…

In the US at least, many pension funds are not sophisticated, they're small, underfunded, and getting taken for a ride by expensive advisors who promise fantastical returns that will help dig them out of their funding ratio hole. Many would be better off using an S&P 500 index fund for their equity component instead of getting wined and dined into an illiquid, opaque private equity investment. Telling that among OECD…

> many pension funds are not sophisticated, they're small, underfunded, and getting taken for a ride by expensive advisors

Who tend to come up with bumfuck benchmarks other than the common ones. Sometimes for good reasons. Often to justify their own comp.

> Many would be better off using an S&P 500 index fund

Maybe. They would probably be better off with some total-market funds (instead of biasing towards large caps, especially if they're small). But my point stands: pension funds don't tend to automatically follow any major index, much less the S&P 500 proper.

Re: S&P 500 rejects SpaceX, also blocking entry for OpenAI and Anthropic

#44

Post by JumpCrisscross »

jb_briant wrote: post #38

I wonder if profitable means that investment must be recouped or just if your operational expenses must be compensated by your earnings. Anthropic is becoming "profitable" while burning a series H of 69 bns usd. Does it count as profitable? I'm curious if someone well versed in finance can answer, because from my uneducated perspective, it's not profitable to burn billions in order to make a billion. https://www.cnbc…

> wonder if profitable means that investment must be recouped or just if your operational expenses must be compensated by your earnings

S&P requires profitability (i.e. net income) according to GAAP. That definition incorporates both ROA and operating income.

Re: S&P 500 rejects SpaceX, also blocking entry for OpenAI and Anthropic

#45

Post by awestroke »

jb_briant wrote: post #38

I wonder if profitable means that investment must be recouped or just if your operational expenses must be compensated by your earnings. Anthropic is becoming "profitable" while burning a series H of 69 bns usd. Does it count as profitable? I'm curious if someone well versed in finance can answer, because from my uneducated perspective, it's not profitable to burn billions in order to make a billion. https://www.cnbc…

EBITDA is typically used to evaluate profitability.

Re: S&P 500 rejects SpaceX, also blocking entry for OpenAI and Anthropic

#47

Post by muadddib »

kortilla wrote: post #32
figmert wrote: post #27

Earlier quoted context omitted.

Why is that relevant? The rules are in place for a reason, why does it matter what the percentage is? They're not profitable. When they prove they're worth the dollars, they can be included, per the rules. Also, S&P500 has a current market cap of $67 trillion, 0.3% of that is some $200billion. That is essentially a wealth transfer to the rich. They don't need it.

> That is essentially a wealth transfer to the rich. They don't need it. These are not valid arguments. The companies that get added to the S&P are always owned in some fraction by rich people. SpaceX is obviously majorly owned by Elon, but it’s also owned by regular employees, a bunch of private investors and other funds that regular people invest in. > They're not profitable. Right > When they prove they're worth t…

So is spacex growing like Amazon was? There is no evidence of growth. And no, Google renting them infra grom then is not growth. If it waa, AllBirds is the next unicorn

Re: S&P 500 rejects SpaceX, also blocking entry for OpenAI and Anthropic

#48

Post by kortilla »

Drupon wrote: post #25

Crazy to see the Twitter behavior here of really smart, well conveyed top level comments replied to by weird propaganda pushing bottom feeders.

The top level comments are not smart or well conveyed, they are just the other side of the internet echo chamber. “Good, the rich don’t need money”, etc.

I think Elon owned companies are just a third rail for any kind of intelligent discussion because it turns into Elon fan boys arguing against Elon haters.

Re: S&P 500 rejects SpaceX, also blocking entry for OpenAI and Anthropic

#49

Post by JumpCrisscross »

SkiFire13 wrote: post #41
kortilla wrote: post #32

Earlier quoted context omitted.

> That is essentially a wealth transfer to the rich. They don't need it. These are not valid arguments. The companies that get added to the S&P are always owned in some fraction by rich people. SpaceX is obviously majorly owned by Elon, but it’s also owned by regular employees, a bunch of private investors and other funds that regular people invest in. > They're not profitable. Right > When they prove they're worth t…

> SpaceX is obviously majorly owned by Elon, but it’s also owned by regular employees, a bunch of private investors and other funds that regular people invest in. Is it really owned by them if Elon retains most of the voting rights anyway?

> Is it really owned by them if Elon retains most of the voting rights anyway?

Owned by various folks. Controlled by Elon. Granted, I don't know how Texas law deals with minority rights.

Re: S&P 500 rejects SpaceX, also blocking entry for OpenAI and Anthropic

#50

Post by JumpCrisscross »

awestroke wrote: post #45
jb_briant wrote: post #38

I wonder if profitable means that investment must be recouped or just if your operational expenses must be compensated by your earnings. Anthropic is becoming "profitable" while burning a series H of 69 bns usd. Does it count as profitable? I'm curious if someone well versed in finance can answer, because from my uneducated perspective, it's not profitable to burn billions in order to make a billion. https://www.cnbc…

EBITDA is typically used to evaluate profitability.

> EBITDA is typically used to evaluate profitability

S&P requires GAAP profits, i.e. net income. EBITDA is above that.

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