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SpaceX bond worth 10% less than issue price – heading for junk bond status

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Re: SpaceX bond worth 10% less than issue price – heading for junk bond status

#41

Post by lucd »

The worst about the SpaceX IPO is Nasdaq changing their inclusion rules for the Nasdaq 100. The index fast-tracked SpaceX stock for inclusion 15 days after the IPO, instead of the normal three-month seasoning period. They also changed its 10% minimum float rule to a 3x weighting boost for low-float stockss. So many people will unwillingly and prematurely invest into SpaceX, before it has any chance to discover its real price. IE: The floating, 5% at launch, could attain 30% end august, if Nasdaq didn't change their rules it would have included SpaceX after this..

https://finance.yahoo.com/markets/stocks/articles/nasdaq-che...

Re: SpaceX bond worth 10% less than issue price – heading for junk bond status

#42

Post by richwater »

lucd wrote: post #41

The worst about the SpaceX IPO is Nasdaq changing their inclusion rules for the Nasdaq 100. The index fast-tracked SpaceX stock for inclusion 15 days after the IPO, instead of the normal three-month seasoning period. They also changed its 10% minimum float rule to a 3x weighting boost for low-float stockss. So many people will unwillingly and prematurely invest into SpaceX, before it has any chance to discover its re…

The Nasdaq is a shit index to begin with. There are so many other options.

Re: SpaceX bond worth 10% less than issue price – heading for junk bond status

#43

Post by martythemaniak »

asim wrote: post #21

Quite honestly IPOs and the stock market in general is a Ponzi scheme. This is something I would never have said before. I am not a skeptic. I invested in the markets for years and made money on Amazon, Google, twilio, and so many others. But I also lost a lot of money buying near or after the IPO. The game is rigged. Those who put money in post IPO in the 12 months after are left holding the bag for years. It takes…

There's been a massive change to public markets in the last decade and the retail path to making money seems to have closed. I made a some money on IPOs using a laughably simple heuristic:

"Is the company market cap low? Do they have a decent product? Is it plausible they'll 10x? Yes -> Buy some amount I can afford loosing"

For example, Tesla IPO'd at $5B cap, it was perfectly plausible to believe they'd be worth $50B some day. Shopify IPO'd at $1.3B, Square at $3B, 10x was perfectly believable. Uber IPO'd at $75B, I did not believe they'd be worth $750B any time soon, or ever. Do I believe SpaceX will be worth 20T in like 10 years? Lol. Fmao even.

Today's IPOs at $1T+ means that private money figured this out and cut the retail public out, IPOs seems to be a really terrible deal these days.

Re: SpaceX bond worth 10% less than issue price – heading for junk bond status

#44

Post by semiquaver »

asim wrote: post #21

Quite honestly IPOs and the stock market in general is a Ponzi scheme. This is something I would never have said before. I am not a skeptic. I invested in the markets for years and made money on Amazon, Google, twilio, and so many others. But I also lost a lot of money buying near or after the IPO. The game is rigged. Those who put money in post IPO in the 12 months after are left holding the bag for years. It takes…

What you’re saying is entirely vibes-based. The actual data utterly contradicts your claim (see sibling).

Re: SpaceX bond worth 10% less than issue price – heading for junk bond status

#45

Post by MikhailTal »

Maxatar wrote: post #37
asim wrote: post #21

Quite honestly IPOs and the stock market in general is a Ponzi scheme. This is something I would never have said before. I am not a skeptic. I invested in the markets for years and made money on Amazon, Google, twilio, and so many others. But I also lost a lot of money buying near or after the IPO. The game is rigged. Those who put money in post IPO in the 12 months after are left holding the bag for years. It takes…

This isn't backed by any evidence though. Jay Ritter maintains an extensive amount of data on IPOs here: https://site.warrington.ufl.edu/ritter/ipo-data/ And his data shows that IPOs for the most part perform about as well as their respective market. That is large multi-billion dollar IPOs perform about as well as the broad market, and smaller IPOs (which constitute the vast majority of IPOs) perform about as well as…

Also, the OP just does not understand how the market works anyway. Surely if it was obvious that investing in fresh IPOs is a bad move, all of the big boys (banks, hedge funds etc) would short them to the point of equalising anyway. Maybe not to the absolute efficient point, but still, why do people think they can see such a huge obvious trend, and also assume that other people cannot see it?

Re: SpaceX bond worth 10% less than issue price – heading for junk bond status

#46

Post by tyre »

richwater wrote: post #42
lucd wrote: post #41

The worst about the SpaceX IPO is Nasdaq changing their inclusion rules for the Nasdaq 100. The index fast-tracked SpaceX stock for inclusion 15 days after the IPO, instead of the normal three-month seasoning period. They also changed its 10% minimum float rule to a 3x weighting boost for low-float stockss. So many people will unwillingly and prematurely invest into SpaceX, before it has any chance to discover its re…

The Nasdaq is a shit index to begin with. There are so many other options.

The NASDAQ is up 27% in the past 1 year. S&P 500 up 21%, DOW +20%.

So, it's doing pretty well!

Re: SpaceX bond worth 10% less than issue price – heading for junk bond status

#48

Post by formvoltron »

lucd wrote: post #41

The worst about the SpaceX IPO is Nasdaq changing their inclusion rules for the Nasdaq 100. The index fast-tracked SpaceX stock for inclusion 15 days after the IPO, instead of the normal three-month seasoning period. They also changed its 10% minimum float rule to a 3x weighting boost for low-float stockss. So many people will unwillingly and prematurely invest into SpaceX, before it has any chance to discover its re…

nah the very worst thing about the spacex ipo is that schwab won't allow me to short it. has nothing to do with the recency of the issue. today i shorted some skhy when i realized it's trading about 30% over the Korean share price (I could be wrong about that)

Re: SpaceX bond worth 10% less than issue price – heading for junk bond status

#50

Post by notahacker »

londons_explore wrote: post #26
notahacker wrote: post #13

Earlier quoted context omitted.

yeah, as the article said bond prices have fallen slightly over the time period but this is much more bond buyers seeing increased risk SpaceX isn't going to have the cashflow or ease of further equity raises to pay them back in the long run. (With it being bonds the upside of "but what if SpaceX actually does become bigger than the present US economy" is capped too)

I don't see a future in which those bondholders don't get paid back. The company has plenty of revenue, and if needed can just turn off the r&d tap and become a boring company. Terrible for the shareholders obviously, but the bond holders will be fine.

This assumes that SpaceX's decision maker decides to prioritise cuts to repay bondholders over R&D to see if they can innovate their way to bigger profits, which doesn't seem a sure bet (tbh I'd put SpaceX under its current management very low on the list of companies likely to do this)

I mean the bond yield is 6.65% over US Treasury returns of 4.75% so it's not like everyone's running in fear of their imminent collapse either. But they're less confident than they were when Elon company valuations looked immune to gravity.

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