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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

#471

Post by slashdave »

dylan604 wrote: post #283
mattbrewsbytes wrote: post #274

Letting new stocks marinate in the market and get 4 quarters of SEC filings along with following all the GAAP accounting practices will definitely help evaluate them before inclusion. The last large boom/bust cycle had a couple of companies, at least, that were doing illegal things. I'm not stating that these three are, just that nobody knows and the process should play out. I do wonder if any of these three companie…

I would expect actual human professional accountants to be involved somewhere in the due diligence stage of those approving the IPO. Then again, I know nothing of the IPO process, and am definitely thinking of mergers and acquisitions due diligence and hoping something exists for IPOs.

Not accountants. Lawyers. And lots of them. Claims merely need to be factual, and can be conditioned on any number of factors as long as these factors are explicitly listed.

Then a big "risks" section is added basically excusing all the authors of responsibility when something "unexpected" happens.

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

#473

Post by opsnooperfax »

jstummbillig wrote: post #408
codegeek wrote: post #298

Earlier quoted context omitted.

Agreed. S&P 500 needs to be seriously gatekeeped. We need safer boring companies in there thatbhave been peoven over a long period of time. Nothing against these companies but they are not proven and ready for S&P 500.

Let's say Alphabet shifts further to ~become a 100% AI company in the same way that Anthropic and OpenAI are. Should they be removed from the index? If not, why not?

Yes.

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

#474

Post by opsnooperfax »

zugi wrote: post #451
mattbrewsbytes wrote: post #274

Letting new stocks marinate in the market and get 4 quarters of SEC filings along with following all the GAAP accounting practices will definitely help evaluate them before inclusion. The last large boom/bust cycle had a couple of companies, at least, that were doing illegal things. I'm not stating that these three are, just that nobody knows and the process should play out. I do wonder if any of these three companie…

> using AI to do their accounting and bookkeeping A friend gave AI access to his accounts to summarize his finances. On reviewing the AI-generated report, he spotted a $500 monthly loan payment that he didn't recognize. He asked AI where it came from, and AI admitted that it was a mistake. Perhaps in its training data, most people have a $500 loan payment, so AI just stuck one in there.

Or maybe the AI made up the part about making it up. There’s no way to tell. Don’t use a model to validate itself.

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

#475

Post by dodu_ »

jstummbillig wrote: post #408
codegeek wrote: post #298

Earlier quoted context omitted.

Agreed. S&P 500 needs to be seriously gatekeeped. We need safer boring companies in there thatbhave been peoven over a long period of time. Nothing against these companies but they are not proven and ready for S&P 500.

Let's say Alphabet shifts further to ~become a 100% AI company in the same way that Anthropic and OpenAI are. Should they be removed from the index? If not, why not?

Yes.

I don't want my life savings tightly coupled to a young and hyped up technology which is currently being wielded in the most antisocial way possible.

Simple as.

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

#476

Post by ralph84 »

christina97 wrote: post #470
ralph84 wrote: post #467

Imagine Anthropic had gone public a year ago when it had a $61.5 billion valuation. Index fund investors would be up in arms demanding this change after missing out on the 15x run to $965 billion.

The point is that that’s a valuation on paper, made up by a small group of investors that have a strong incentive to have the number be high. Would the number have gone up like this if it were a public company?

Who knows, it could have gone up more. Sandisk just did 40x in a year as a public company. That's the point of an index, buy everything so you don't miss out on the outliers that provide most of the return.

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

#477

Post by tdesilva »

zugi wrote: post #451
mattbrewsbytes wrote: post #274

Letting new stocks marinate in the market and get 4 quarters of SEC filings along with following all the GAAP accounting practices will definitely help evaluate them before inclusion. The last large boom/bust cycle had a couple of companies, at least, that were doing illegal things. I'm not stating that these three are, just that nobody knows and the process should play out. I do wonder if any of these three companie…

> using AI to do their accounting and bookkeeping A friend gave AI access to his accounts to summarize his finances. On reviewing the AI-generated report, he spotted a $500 monthly loan payment that he didn't recognize. He asked AI where it came from, and AI admitted that it was a mistake. Perhaps in its training data, most people have a $500 loan payment, so AI just stuck one in there.

is this the ChatGPT finance features they launched in May? it keeps asking me to integrate my finance data, but I have doubts about how useful it would actually be (not to mention some distrust about how well they would actually protect my data).

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

#478

Post by macNchz »

oarla wrote: post #472

I don’t have any background in finance, but what is stopping these companies from creating their own index and promoting it heavily? They have the market cap and the capital backing to do it I presume.

Because that doesn't force tons of passive investment dollars to participate. Being a part of the S&P500 doesn't require heavy promotion, they'd just get a slice of the investment from the millions of people who auto-invest money each month in retirement programs that buy S&P500 funds (among other things). There are already other indexes and funds where you can invest in high-tech/growth companies, but the people who are interested in that level of risk are already investing in them. These companies want to slip into the S&P because they'd get investment from people who are not specifically investing in high-risk/high-growth companies.

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

#480

Post by RiverStone »

dmboyd wrote: post #300
mattbrewsbytes wrote: post #274

Letting new stocks marinate in the market and get 4 quarters of SEC filings along with following all the GAAP accounting practices will definitely help evaluate them before inclusion. The last large boom/bust cycle had a couple of companies, at least, that were doing illegal things. I'm not stating that these three are, just that nobody knows and the process should play out. I do wonder if any of these three companie…

Reading the Spacex S-1, there’s a notable footnote (notable in that it’s a unique disclosure amongst all filers in the context it’s presented and is not required by any FASB standard). It calls out that land is not a depreciable asset. That really didn’t need to be said and it seems to be sourced from memes from Reddit. It is the kind of infantile patronizing feedback you would get if you asked for comments on financ…

Can you elaborate? That’s an interesting observation. What memes were you referring to?
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