The financial press failed to run headlines damning the SpaceX IPO, or all the ongoing false promises Elon makes.
And now they report that investors, many of whom are their customers, are suffering...
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
#72Re: SpaceX bond worth 10% less than issue price – heading for junk bond status
#73Earlier quoted context omitted.
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)
I'm not an investor in SpaceX but I don't think shorting stocks at IPO should be allowed. The market should be given time to settle on a price, and it's unlikely that anyone needs to short it on day 1 for hedging. It's purely price speculation. Yeah, I know why people _want to_ (betting), but it doesn't serve a broader economic purpose.
Going long or going short is your bet on the market. If you can go long, you should be allowed to go short. Restrictions on any trading means you don’t have confidence in the price in which case it shouldn’t be available for trade.
Re: SpaceX bond worth 10% less than issue price – heading for junk bond status
#74I can't comprehend for the life of me that people put their life savings in what Elon Musk is doing. Are people not seeing how he's lying about the future all the time? He said he aimed to have 5000 Optimus robots out by end of 2025, 50000 by 2026 and 10 times that in 2027. He promised in 2015 that full autonomous driving would arrive in 2 years and we aren't there yet 11 years later. He even said in 2016 that there…
Every company you mentioned has made more progress in those spaces than anyone else, and they are all clear progress towards the goals discussed.
Re: SpaceX bond worth 10% less than issue price – heading for junk bond status
#75Good thing there's a strong corporate governance model at SpaceX where the c-suite is fully accountable to an independent board of directors, who could use their majority voting power to remove that c-suite at will. Could you imagine the abuse of power that could happen if one person held over 50% of the voting power at such a company?
Is it abuse of power or company success? Wouldn’t shareholders vote out any crazy successful ideas Elon had? Likely bankrupting companies at their early stages?
No one ever votes out the guy running the ring toss at the carnival either. What if your man only plays rigged games so he can resist anyone looking at the books or having a voice?
Re: SpaceX bond worth 10% less than issue price – heading for junk bond status
#76A stupid/naive question. Why does this affect SpaceX? They have their money(The IPO) Any third party trading value does not change that. Sure there may be individuals, officers of SpaceX who hold these instruments who will be negatively affective, but the company itself? My best guess, it makes it harder to get loans in the future.
The losses fall on bondholders now, but it does make it harder for SpaceX to raise money going forward. And if they actually slip into junk territory, some institutional investors will be forced to sell (mandates only allow investment-grade), pushing prices down and yields/spreads up even further.
That can snowball: wider spreads → higher borrowing costs → more stress → wider spreads. The existing bonds' coupons are fixed, so the real bite is on future issuance and refinancing.
Lots of capital-intensive companies (SpaceX is definitely in this category) lean heavily on debt markets to fund ongoing investment and roll over maturing debt, so losing cheap access is a big deal.
Re: SpaceX bond worth 10% less than issue price – heading for junk bond status
#77Isn't it realistically only worth talking about SpaceX stock a few years out? The random walk the stock will do after an IPO seems very uninformative.
Normally I would agree, but SpaceX being forced into the Nasdaq at a 3x multiplier makes this a non-normal situation.
Re: SpaceX bond worth 10% less than issue price – heading for junk bond status
#78Earlier quoted context omitted.
Are super shares like Zuckerberg's and Musk a new thing? Genuinely curious if they're a recent invention or something that's quietly happened for a while because it seems like a large inversion of the deal of going public, lose some control of the company in exchange for a large amount of cash but these nonvoting/supervoting share splits seem to completely upend what I understood to be part of the deal for access to…
Some media companies had them before the 1980s. New York Times issued dual class in 1969 so that the owning family maintained editorial control. Berkshire Hathaway is possibly the most famous from the 80s/90s. The class A shares are significantly more expensive and proportionately even more powerful than the class B shares. The lower price version was important back when physical exchanges didn’t support fractional s…
Berkshires share classes are different in that A is exactly ten B shares and anyone can convert A to B and hold them. The dual share classes that are bad separate control from ownership.
Re: SpaceX bond worth 10% less than issue price – heading for junk bond status
#79Earlier quoted context omitted.
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)
I'm not an investor in SpaceX but I don't think shorting stocks at IPO should be allowed. The market should be given time to settle on a price, and it's unlikely that anyone needs to short it on day 1 for hedging. It's purely price speculation. Yeah, I know why people _want to_ (betting), but it doesn't serve a broader economic purpose.
To settle on a price, you need smart investors to be able to push it either way, which they need shorting and leverage for.
Plus there's option traders who naturally need to go short sometimes.
Re: SpaceX bond worth 10% less than issue price – heading for junk bond status
#80I can't comprehend for the life of me that people put their life savings in what Elon Musk is doing. Are people not seeing how he's lying about the future all the time? He said he aimed to have 5000 Optimus robots out by end of 2025, 50000 by 2026 and 10 times that in 2027. He promised in 2015 that full autonomous driving would arrive in 2 years and we aren't there yet 11 years later. He even said in 2016 that there…
He claimed that he would unearth billions of dollars of government fraud, only to lie about that too. Instead his team cut aid programs and have contributed to an estimated 700,000 deaths so far.
https://www.newyorker.com/news/the-new-yorker-interview/the-...